ProducePay providing $60M in financing to Mexican produce growers
ProducePay, an alternative financing, data and marketplace company serving the $300 billion fresh produce market, announced its 2020 financing totals. With its harvest season now complete, ProducePay provided Mexican farmers with over $60 million in financing and empowered them to grow over $750 million worth of fresh produce exported to the United States.
Helping farmers in the U.S. and countries across Latin America grow over $2.5 billion of produce, ProducePay is on pace for 99 percent year-over-year revenue growth in 2020.
Mexico is the top produce trading partner with the United States. Over half of all imported produce comes from Mexico, and that number continues to grow: imported Mexican produce has doubled as a percentage of U.S. consumption over the last 10 years. About $14 billion in fresh fruits and vegetables imported from Mexico annually, which amounts to 25 percent of total U.S. produce consumption.
Since 2014, ProducePay has raised $250 million in funding to help produce growers navigate the opaque produce market by providing access to three tools growers have traditionally lacked: financing, pricing data and a network of trusted buyers and suppliers.
Fresh produce growers have heavy cash needs at each stage of the growing cycle, from seeds to harvest to shipping, but traditional lenders often cannot provide sufficient capital to meet those needs. Banks normally cannot accept future harvest of a perishable crop as collateral, and farmers rarely have other hard assets that are not already pledged as collateral, since they often lease, rather than own, the land they operate.
ProducePay eased liquidity crunches at multiple points in the harvest cycle in 2020 by financing over $2.5 billion of produce (up 100 percent from 2019).
Growers do not know if they are getting a competitive price for their products because there’s no central produce market or exchange to allow for price discovery and risk management.
ProducePay serves over 6,000 weekly active users (farmers and distributors) on the largest online produce information network. The ProducePay network aggregates public, private and proprietary data sources into the first-ever pricing index for over 200 produce commodities, which users access through a daily email digest, pricing dashboard, or recently launched iOS app
Trusted Network of Buyers and Suppliers
Growers need trustworthy buyers who are capable of selling for a fair price, transacting according to PACA fair trade practices, and paying in a timely manner. Distributors need a reliable source of produce amid seasonality and dynamic weather conditions.
ProducePay serves as a managed marketplace on which both parties can find their counterparts within the highly fragmented global produce market.
This year, ProducePay helped Mexican produce growers weather the COVID-19 pandemic by providing liquidity at key points in the harvest cycle. Among dozens of others, they’ve helped:
- An asparagus and melon grower in northeast Mexico access $1.5 million for land preparation, seeds, and fertilizers three months before harvest.
- A strawberry grower in central Mexico secure $200,000 in funding for plantlings two months before harvest.
- A tomato and cucumber grower in western Mexico access $1.2 million for seedlings and land preparation three months before harvest
“Living and working on my family’s farm in northwestern Mexico, I experienced firsthand the rigidity of the harvest cycle and the liquidity problems that come with it,” said Pablo Borquez Schwarzbeck, founder and CEO of ProducePay. “Now, we’re proud to have helped ease those cash flow problems for so many produce growers in Mexico and Latin America.”