Agriculture fintech firm ProducePay has raised US$43mn in funding, including US$6mn from the International Finance Corporation (IFC), as it looks to boost access to trade finance for small producers in Latin America.

The series C funding round was co-led by Silicon Valley investment firm G2VP and the IFC, which is the private investment arm of the World Bank. The InterAmerican Development Bank also participated through its LatAm funding entity IDB Invest.

Two previous investors – Anterra Capital and Coventure – provided further funding, while Astanor Ventures, IGNIA and Finistere participated as new investors.

The agreement means California-based ProducePay – which provides financing to growers, as well as data analytics and supplier marketplace services – has now raised more than US$300mn in debt and equity funding since its launch in 2014.

Juan Gonzalo Flores, country manager of IFC México, says the 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,” he says. “This project supports the growth of a specialised fintech player, which will increase market competition and drive financial inclusion in Mexico.”

An IFC statement adds the investment “will help reduce traditional banking costs and improve supply chains, boosting financial access, productivity, and exports”.

Though around four-fifths of ProducePay’s financing is currently provided to farmers in Mexico, the company plans to expand its offering in Chile, Peru and across Central America.

So far, it says it has financed over US$700mn to growers, which have then in turn produced crops worth more than US$3bn. Despite the disruptions to global trade caused by the Covid-19 pandemic, ProducePay’s revenue doubled during 2020.

However, co-founder and chief executive Pablo Borquez Schwarzbeck says there remain “disruptive barriers to trade” in the region.

“The global fresh produce market is opaque, fragmented, and dominated by manual processes, and these obstacles make it difficult for growers and distributors to thrive,” he says.

By using technology to improve transparency and predictability, Borquez Schwarzbeck says growers and distributors can benefit from “fairness… throughout the entire produce value chain, from seed to sale”.

Ben Kortlang, a partner at G2VP, adds that “by capturing real-time data through a global online marketplace, ProducePay provides a solution to the future’s biggest agricultural challenges”, including the “de-commoditisation” of food and market volatility due to climate change.