México city, México, May 20th 2021. In a bid to bring transparency, predictability, and fairness to burgeoning Mexican fresh produce exports, an investment by IFC, a member of the World Bank Group, aims to identify innovative players that can promote inclusion and competition. The investment will help reduce traditional banking costs and improve supply chains boosting financial access, productivity, and exports.
As part of the financing, IFC is investing $6 million in ProducePay, a California-based agriculture fintech company that offers a suite of solutions ranging from grower financing, real time data and analytics, and a marketplace for all growers, distributors, and suppliers. This investment is part of a $43 million Series C funding round led by Silicon Valley-based G2VP and co-led by IFC with the participation of the IADB (InterAmerican Development Bank). While helping the company reach more farmers in the Latin America and the Caribbean (LAC) markets, IFC's participation will improve the company's credibility for current and prospective investors.
Mexico and other Latin American countries are major suppliers, growing over $30 billion in fresh produce annually, the majority by SMEs. These smaller farmers are often underserved by traditional banks because fresh produce, given their short shelf life, are not accepted as adequate collateral. In addition, low productivity and poor market integration hinder the growth of Mexico's agriculture sector.
"One of IFC's strategic priorities in Latin America and the Caribbean (LAC) is to expand SME financing and catalyze investments in digital solutions. In this context, IFC's funding will help reduce transaction costs and improve access to finance for small producers in Mexico and beyond. Moreover, it will integrate farmers into export chains, improving their access to new markets," said Juan Gonzalo Flores, Country Manager of IFC México. Flores added: "This project supports the growth of a specialized fintech player, which will increase market competition and drive financial inclusion in Mexico."
Pablo Borquez Schwarzbeck, co-founder and CEO at ProducePay, said: "IFC's support is undoubtedly helping us foster economic development across the Americas and eliminate disruptive barriers to trade. We are looking forward to increasing access to crucial working capital needs and engaging deeply with these communities."
Currently, over 80 percent of ProducePay's financing is for farmers in Mexico and the company plans to expand into Chile, Peru, and Central America. The company's competitive edge includes providing farmers access to information and leveraging data and insights to connect buyers and sellers of produce introducing fairness and transparency into a traditionally opaque industry. Since its launch in 2014, the company has financed over $700 million to farmers, supporting them to grow crops worth over $3 billion.
For more than a decade, IFC has supported fintech companies that focus on technology-driven innovation in financial services. By mid-2020, IFC invested more than $600 million in equity and debt in early- and growth-stage companies around the globe.
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.
ProducePay's mission is to bring transparency, predictability, and fairness to the fragmented and opaque $300 billion global fresh produce market. For more information, visit producepay.com.