TerraMagna receives investment of more than R$220 million to provide credit to farmers in Brazil

TerraMagna announced today (12/01) that it has raised US$40 million (around R$220 million) in new equity and debt funds through SoftBank Latin America Fund with participation from Shift Capital and Milenio Capital, in addition to previous investors. Previously, the company had raised $2,2 million from ONEVC, MAYA Capital, Accion Venture Lab, The Yield Lab and Canary.

With a portfolio of more than US$120 million in 2021 - an increase of more than 10x compared to 2020, making it the largest agricultural fintech by asset volume in Latin America - TerraMagna's perspective is to expand its regional presence and diversify its offering financial products.

TerraMagna provides integrated financing in the field through partnerships with input distributors, industries and other members of the value chain who already have a long-term local relationship with farmers, managing their sales and credit analysis workflows. Integration with these processes allows TerraMagna to address the lack of information on farmers' financial health and credit performance, which is then leveraged alongside alternative data sources to accurately assess farmer creditworthiness and make credit available. In this way, farmers can make purchases in a simpler, faster, cheaper way and with a more diversified offer, while distributors and industries drive more sales - in some cases, the increase in revenue was greater than 20%, doubling the final result .

Testimonials

Bernardo Fabiani – CEO and co-founder of TerraMagna

“Agriculture has a colossal and severely underserved value chain that directly impacts the lives of all people through food security and derived products. Not only can this current importance not be overstated, but its role will become progressively greater over the coming decades as humanity faces existential environmental, humanitarian and political crises. Credit has been the ubiquitous driving force that has kept agriculture going, but for it to rise to these coming challenges, it cannot just function. It will need to have the incentives, mindset and long-term outlook that only healthy companies can afford. It is exactly this ubiquity in the value chain, added to its catalytic potential, that makes credit the best means to disseminate this transformation. We are grateful to our investors, whose help will be invaluable on this long journey to help agriculture achieve its critical mission of continuing to feed the world.”

Felipe Fujiwara - Investment Leader at SoftBank Latin America Fund

“Agriculture is a large market in Brazil, but small and medium-sized farmers still lack working capital financing to buy seeds, fertilizers and pesticides. The TerraMagna team developed innovative technology and a business model that allowed them to serve this segment efficiently. Over time, we believe more data will continue to improve TerraMagna’s underwriting models to consistently reduce the cost of financing for small and medium-sized farmers.”

Bernardo Garcia - General Partner at Shift Capital

“We analyzed Brazilian agribusiness and understood the enormous demand for credit in the sector, generating high conviction about the possibility of a unicorn in the ecosystem. After meeting with dozens of companies in this space, we found that TerraMagna has all the attributes we were looking for. TerraMagna is the most technologically prepared, with the ability to implement and monitor multiple credit operations simultaneously and effectively. Furthermore, the company's go-to-market is extremely effective - leveraging channels that farmers are familiar with, it makes the best use of the agricultural value chain and drives incredible portfolio growth in a market that has historically been anti-innovation. . We had known about the company for some time and decided to invest after it consistently delivered exceptional credit performance and growth.”

Gustavo Ahrends, Managing Partner of Milenio Capital

“Although agribusiness represents more than 25% of Brazilian GDP, the lack of basic financial services is one of the biggest obstacles to the continued development of the sector. Combining our expertise in structured finance with TerraMagna's distribution and technology, we developed the most suitable financial products for the sector - starting the construction of what will become the largest Brazilian agribusiness bank. We are happy to have participated, alongside SoftBank and Shift Capital, in structuring a business to better accelerate TerraMagna's growth.