Welcome back and happy Sunday! ☕️
Getting back on track. This issue packs a punch 🥊 with funding announcements, a fund launch, an acquisition and a €50m lending milestone in Europe. I've counted 15 different companies below.
📣 Updates all round:
➔ Funding announcements (8 companies) 👀
➔ Fund launch in Brazil 🇧🇷
➔ Ever.Ag shopping in the Insurance sector
➔ A €50 debt milestone from a European startup
➔ Other - What's the way forward for Regen?
Who is fundraising?
Fundraising has 📈 especially for marketplaces. Wow.
💳 Agrotoken secured $12.5m in a pre-Series A. The Argentina founded company uses grains in storage as collateral for a Visa issued card (who particpated in the round) and offers producers and traders liquidity on their inventory.
This solution is very interesting as this is a real problem in many countries where the seasonal cashflow of agriculture production is exacerbated by the seasonal nature of marketing and pricing. So storing grains, marketing them later at higher prices and getting some cash liquidity in the intervening period is needed.
The company already appear to be active in Brazil and despite the Visa partnership and blockchain technology, the real challenge for them will be scaling with the right operational partners (warehouse providers, collateral managers etc). Bringing Bunge, the major grain trader, onboard as an investor seems smart but might hinder partnerships with the other majors. I hope not too much and look forward to seeing where this appears next.
🌴 SeeTree banked $17.5m in a Series C round which will facilitate expansion in Latin America, Europe and further product development.
SeeTree provide data collection and analytics to the global tree crop sector with numerous clients in the U.S. and Brazil.
The company is building a loyal investor base among financial institutions, with the the IFC and EBRD (European Bank for Reconstruction and Development) doing follow on investment and now being joined by commercial banking giant HSBC's Asset Management arm.
🐙 Captain Fresh also started the year very strongly by extending their C round by a further $13.5m. The India based animal protein marketplace previously raised $30m in Sept 2023 to expand its markets to Europe and the U.S. and has now added additional investment. Cash is king.
🗃️ Maalexi secured $3m to bolster their efforts to remove payment and performance risk from cross border trade in food and agri produce. The Dubai based company seem to target regional trade in goods, with Dubai becoming more popular as both a trading and consumption hub in the Middle East, Africa and Indian Ocean regions.
The United Arab Emirates imports over $2.7bn in meat 🍖 , $2.2bn in dairy 🥛 or even $1.4bn in fresh veg alone. This market is huge and ALL cross border - there is little food production within the UAE - meaning lots of cross border risk from unknown partners and other transaction risks.
🌾 Semaai are yet another startup focused on the Indonesia agriculture sector, specifically on Java, who have obtained a combined $4.7m debt and equity funding from Japanese investors, Cyber Agent Capital.
Semaai operate an inputs marketplace and they have raised these funds to specifically expand embedded fintech solutions with partnering financial institutions and fintech companies.
🏬 Shamba Pride have achieved a combined debt and equity raise of $2m and $1.7m (Seed) respectively from investors such as Seedstars Africa.
Shamba Pride operates in Kenya and targets the Ag retail segment to provide high quality inputs alongside high quality data insights to 50 suppliers from their network of 2700 retailers. Shamba have supplemented the business by proving market linkage services to farmers, offering buy now pay later credit and working capital management to the dealers themselves.
- This playbook from Shamba and Semaai is becoming well established in most markets and in the past 2 months I've spoken to companies operating similar models in Vietnam and Mexico and noted dozens of others in the newsletter raising capital in recent months.
🌱 Apollo Agriculture keep expanding their loan portfolio in Kenya with further $10m debt commitment commitment from European impact funds ImpactConnect and Swedfund.
🐠 AquaExchange have raised a $6m Series A to further promote automation in the aquaculture sector in India and improve data visibility for both farmers, buyers and lenders.
Speaking of fundraising, Graze will shortly issue the Agri Fintech investment report for 2023. If you haven't done so yet, subscribe below to get more information when it lands. ⤵️
Fund Launch 🚀
January 2024 also give birth to a unique collaboration between AGI, the Canadian storage infrastructure provider, and Opea Capital to launch a $50m fund to finance grain handling and storage equipment in Brazil.
.....Just when I thought I had seen it all.... There is lots to like with this announcement which makes a huge amount of sense.
Grain silos, warehousing and handling equipment is pretty common but is also a niche asset to finance. However, the finance is essential and if you operate in markets where there is a dearth of debt capital for the agriculture sector - such as Brazil - then you need to fix it yourself.
🛒 Acquisitions are few and far between in Agrifintech, but every now and then small transactions arise. This month Ever.ag announced its acquisition of Agency Root, a Saas platform focused specifically on crop insurance agents in the U.S. No details were disclosed.
Ever.Ag are probably the most active acquirer of Agtech saas businesses in the U.S. market and have rolled up several brands including the Ever.Ag price risk management business, the original Dairy.com, EFC systems which operates numerous ERP systems and more recently startups such as Roger, the logistics platform.
When will there be more M&A? Hmm... good question. Agtech company valuations have plunged, which does not make equity an attractive currency to go shopping with.
On the financial services side, I am surprised not to see more activity, but I think this is down to recent turmoil from rising interest rates generally and also specifically a lack of clarity on strategy from many Ag focused banks in the U.S. Last year, Graze research identified just 10 institutions in the U.S. who had a sizeable Ag loan concentration and a modern tech platform on which to build. More on U.S. Bank consolidation.
Fifth Third are an interesting example of a bank who have bought vertical platforms in the Healthcare sector and even bolstered this by buying a banking-as-a-service platform in 2023 to help roll out their products. When Food and Ag?
💶 Europe based HeavyFinance have celebrated the milestone of €50m disbursed across 1,700 projects in Bulgaria, Latvia, Poland, Portugal and Lithuania.
In a note to investors, the company outlined an average loan size of €29k, with a weighted average interest of 12.85%, so veering more towards smaller producers.
In terms of portfolio composition, their local markets in Latvia and Lithuania appear to be performing well, with farmers in Poland and Portugal suffering from weather related issues, which has had a knock on impact on repayments.
The company is also eyeing the carbon finance market later this year.
What else was interesting?
Regen Agriculture is a bit of a muddle and unsurprisingly financing it is also a muddle.
I was pleasantly surprised with this write up from the World Economic Forum which likes the concept, picked some obvious holes in it and made some clear action points.
Meanwhile, one corporate should be applauded for working 'Regen' from the ground up, rather than the marketing department is Olam who offer a glimpse of what might be across the Cotton value chain. What do you think?
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