Connecting farmers to investors, regulated crowdfunding marketplace HeavyFinance has raised $1 million in order to provide farmers with short-to-medium term financing solutions ranging between €6,000 - €300,000. Farmers may then use these loans across the board, including the financing of the purchase of used farming equipment, land, and/or used as working capital. The funding will enable to company to take onboard more team numbers in order to expand faster in existing markets, and further, with Poland up next.
Second only to the energy sector, the agricultural industry is the largest producer of greenhouse gas emissions. And yet, for all the talk of Net Zero and Sustainable Development Goals, the industry that puts the food on our plate often goes grossly undercooked. Farmers are pressured to make their practices more sustainable, but yet severely underfunded in order to do so.
And let’s be honest, no farmer is in the game to become wealthy. One need not look far to see that small to medium-sized farms can struggle even during the best of times to make ends meet, say nothing for the tremendous amount of capital needed to modernise their operations.
So dire is the situation that according to the Fi-Compass report by the European Commission, the total market gap in the European Union is between €19.8 to €46.6 billion.
Lending a hand to the harvest, HeavyFinance is stepping up to fill this gap by way of providing farmers with loans via an investor-to-farmer marketplace. With banks traditionally wary of agricultural-based loans defaulting, HeavyFinance is taking a different route and provides farmers with capital of up to €10,000 ancillary-free. Any amounts above this number; land or heavy machinery can be provided as collateral, a practice typically unheard of in the industry.
Now HeavyFianance isn’t turning a blind eye when it comes to the farming biz, realising that not every loan is going to be used to help facilitate a complete and total transformation to sustainable farming practices. However, those that do use the investment to purchase less polluting equipment, move towards soil carbon sequestration and/or no-till farming initiatives, receive more favourable loan conditions than those that don’t.
At present, HeavyFinance reports that 65% of the €13.5 million in loans it has helped facilitate in Bulgaria, Latvia, Lithuania, and Portugal have been provided to farmers engaged in sustainability-focused projects. Looking down the road, the startup also has commercial carbon credit generation plans for farmers on its horizon.
“The agricultural sector is a key battleground for fighting climate change and the entire field is being rapidly reshaped by technology. A new generation of farmers is waiting on the sidelines, ready to transition to agricultural models that are kinder to nature,” comments CEO Laimonas Noreika. “Unfortunately, up until now, access to finance has been a major barrier. There is an outstanding gap in financing for small and medium farms in Europe and a robust investor appetite for high-yield investment products. HeavyFinance is here to address both needs.”
HeavyFinance’s $1 million funding round was led by Poland's Black Pearls VC and saw co-investments from bValue and Startup Wise Guys. Several angel investors including Marius Krikštopaitis (StartupHighway) and Adrian Watson (CFO at Lendable) also participated in the round.
“HeavyFinance is well placed to step in and solve an enormous pain point for farmers. The company’s robust platform, deep sector and market knowledge, and exceptional customer service form a strong basis for building a trusted household name in the farming community,” commented Black Pearl VC’s Wojciech Drewczynski.