Produce Pay, a food tech startup with an online marketplace for fresh produce farmers and distributors, has raised $14 million in Series B funding.
Agribusiness marketplaces are a hot trend in agrifood tech at the moment as entrepreneurs look to help farmers have more options than existing distribution channels to give them more flexibility, hopefully more money in their pockets by opening up new markets, and also sometimes taking a food waste reduction angle.
Produce Pay’s unique selling point is its financial offering, which ensures farmers are paid for their produce the day after it’s shipped through a lending platform; farmers are often left waiting for produce to sell before they’re paid, leaving them in a risky financial position post-harvest.
Anterra Capital, the food and agriculture technology investor led the round with participation from Rabo Frontier Ventures, software investors Coventure, early-stage investment fund Social Leverage, diversified investors FJ Labs, sustainable impact investors Greenhouse Capital, seed-stage investors Moonshots Capital, and fintech angel investor group Tribeca Angels.
The Los Angeles-based company claims to have created the first ever means of securitizing perishable produce as a financial asset through the use of technology. Its platform provides immediate access to financing for farmers and distributors in the US, Mexico, Canada, Honduras, and Chile for fresh produce sold in the US. This alleviates the financial pressure that growers often face while providing them with better cash flow for distributors.
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“We have spent the last three years reinventing how the produce industry accesses short-term cash needs and the transparency of their supply chain,” said company CEO Pablo Borquez in a press release announcing the funding. “To date, ProducePay has helped move over $850 million of produce.”
Founded in 2015, ProducePay reports providing liquidity to over 600 growers and distributors in six countries, financing over $850 million of produce in under four years. The Series B funding will be used to finance the next growth phase of the business as it scales its financing business and develops its software platform. It follows significant growth in 2017, in which the company reported financing $400 million of produce, up from its $17 million figure in 2015.
In addition to cash flow solutions, ProducePay has recently launched multiple tools for online trading and data insights. These tools aim to streamline the produce sales process by allowing verified distributors and grower-shippers to find new business partners, communicate digitally and access real-time pricing and market conditions. All of its users are vetted and verified, removing the uncertainty of working with a new partner. Users chat with connections, organize contact information, and add details to keep track of their trading practices, commodities, and seasonality. The dashboard helps organize all pending negotiations and transaction histories.
The company also offers up-to-date data in lieu of USDA data, which isn’t always current. The data offered to ProducePay users includes real-time market pricing, weather, and movements.
Produce Pay has now raised around $23 million in equity funding and $70 million in debt financing, which it closed last year.
Produce Pay was a winner of the AgFunder Innovation Awards in 2016.