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Los Angeles based farmer financing platform ProducePay has raised $77m in equity and debt funding led by CoVenture. ProducePay reaches out to farms to buy their crops at a price that the company sets up front, then goes out and sells those crops on the market. If the company breaks even, the farmer doesn’t owe a cent. If the company makes a profit, the profits are returned to the farmer minus a commission or percentage of the profit that ProducePay collects.
ProducePay has come up with a model that works for those farmers whose crops can’t be siloed or stored. For Schwarzbeck it’s a means of doing his part for the Agricultural 2050 Challenge. Scientists estimate that agricultural yields and farming methodologies will need to change to support the projected global population of 9 billion people by 2050. For some investors, like the group behind the 2014 Farm 2050 initiative (Innovation Endeavors and Flextronics’ Lab IX), that means investment in technology. But Schwarzbeck argues that financing is a critical component of any battle to improve farm yields. “What many people don’t realize is that one of the biggest impediments to agricultural supply growth is the proper allocation of funds to the folks who otherwise have the means to either begin farming or increase their current production,” Schwarzbeck says.
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