Rural credit startup raises BRL 120 million

Rural credit fintech Agrolend has just received R$ 120 million in funding, money that will be invested in expanding the business aimed at medium-sized producers across the country — today the startup has 300 customers in 11 states.

Part of the investment, R$ 80 million, was obtained in a series A round, a term that names the first funding to expand a company after its business model has been validated. The fund focused on Brasil Valor Capital, created by the American Michael Nicklas, led the round. Agrolend joins unicorns Loft, CloudWalk and Gympass, which are in the group’s portfolio.

The remaining R$40 million was through a FIDC (Investment Fund in Credit Rights, exercised by credit securities) in which Itaú Asset, Verde Asset and Augme participated.

Founded in December 2020, the company works with medium property clients. Today, the app’s users earn between R$500,000 and R$5 million a year — a range that, according to the founders, is less served by lines of credit. “They are too small for big banks and too big for Banco do Brasil lines”, says the startup’s executive president, André Glezer.

There are 700,000 potential customers in the country, argues André, and to attract them, they use the well-known agility of fintechs.

To get the credit, you basically need to fill out a registration form, go through the approval process, sign the contract on your cell phone, photograph it and “the operation is done”, says André.

CFO Alan Glezer says the company has already received photos of people signing the contract lying in bed at home or on top of their tractor while working.

For him, saving the time of an average producer takes on another scale, because unlike a large company, it is the owner who goes to the registry office, then to the bank and eventually has to go through that same path again when something goes wrong. “The farmer’s time is very valuable. It is he who is in charge of the property, producing”, he says.

In addition to owning medium-sized properties, most producers are over 50 years old, a different audience from the more well-known fintechs. Tomatoes, grapes, milk, coffee, sugar cane and peanuts are some of its crops, but soy and corn continue to be the flagship of the properties, plantations for 40% and 25% of customers, respectively.

For now, the start-up company has no default, and the trend, they say, is for the rate to remain low.

“These are people who depend on credit,” says Alan. “We’re not lending money to a company, to a restaurant. He’s not going to tarnish his name unless it’s a very catastrophic situation.”

The loans are made to individuals, as many of these producers do not have a publicly traded company, and at a rate of 1.3% per month. The money does not fall into the account, but finances inputs such as seeds and fertilizers.

“It’s like going to a car dealership to buy a car: you leave the store with a car and a credit from the Itaú bank. That’s what we do with agricultural stores”, summarizes André.

There are three priorities for the fundraising check: increase the team to 50 people – today the team has 15 –, finance more loans and improve the platform, which according to Alan, “has to be perfect”. “The client has to be able to do everything via cell phone”, says the entrepreneur. They aim to grow their customer base 20 times over the next two years.