Agrifintech Agrolend banks $53m Series C: ‘It demonstrates the market’s confidence in our business model’

• Agribusiness finance platform Agrolend has raised a $53 million Series C round, bringing its total funding to nearly $100 million.
• Impact investor Creation Investments and Syngenta Group Ventures led the round.
• New investors Vivo Ventures, L4, and Japan’s Norinchukin Bank also participated alongside current ones including Valor Capital, Lightrock, Yara Growth Ventures, SP Ventures, and others.
• Agrolend will use the funds to expand its credit offerings to industries, retailers and cooperatives.

Why it matters

Agrolend cofounder and CEO André Glezer says the Series C is “one of the largest” in the history of Brazilian agribusiness and that it “demonstrates the market’s confidence in our business model and prepares us for the next stage of growth, where we will serve major players in the sector, both national and multinational.”

“We are excited to expand our financing capacity for farmers, especially at this particularly challenging time for credit in agribusiness,” he adds.

Access to credit has historically been a major challenge for Brazil’s smallholder farms, which make up about 75% of all farms in the country. An additional challenge in 2024 is the decline in soybean and corn prices, which has further diminished farmers’ margins.

“In Brazil, we are at a moment of high interest rates additionally compressing the farmer’s margin. So, given that, non-performing loans to farmers (defaults) are increasing overall in Brazil,” says Glezer.

Agrolend supports farmers via its lending platform that offers credit for purchase of agricultural inputs such as seeds and crop protection products. The company has a network of more than 150 partners to support this process including ag retailers, industries, and cooperatives.

Loans are formalized through the issuance of a Cédula de Produto Rural Financeira (CPR-F), a common financial instrument in Brazilian agribusiness, and signed via the farmer’s WhatsApp.

The company’s digital-native system allows Brazilian agribusiness producers to bypass many of the bureaucratic barriers that would normally stand in their way when it comes to obtaining much-needed credit. The entire process, from request to loan, takes about two days, says Agrolend.

Earlier this year, Agrolend obtained a BBB+ rating from Moody’s, officially making it “investment grade.”

The Series C funding will allow Agrolend to expand its credit offerings to industries, retailers and cooperatives without increasing its leverage ratio. “Leverage will be kept at a comfortable level, maintaining a tier 1 capital ration above 20%,” says Glezer.

“Agribusiness is a cyclical business and Brazil is structurally very competitive in agribusiness,” he adds. “The conditions have already begun to improve (prices, productivity, margins to farmers), and Brazil has a massive potential for growth in the ag space. With a lot of capital, Agrolend will be able to expand its loan portfolio considerably without taking additional risks through an excessive high leverage ratio.”

The company’s goal is to grow its credit portfolio to $600 million and serve roughly 10,000 small- and medium-sized farmers across Brazil.