Agri-tech lender Arya.ag secures $30 million debt via GuarantCo
24 Jan 2025, 03:23 PMGuarantCo, funded by governments of the UK, Switzerland, Australia, and Sweden, provided two partial guarantees to HSBC India for the loan given to Arya.ag.
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Agritech lender Arya.ag has raised $30 million (or Rs 250 crore) debt facility from HSBC and GuarantCo, a financial institution under the Private Infrastructure Development Group (PIDG).
GuarantCo, funded by governments of the UK, Switzerland, Australia, and Sweden, provided two partial guarantees to HSBC India for the loan given to Arya.ag.
The funds will be allocated to warehouse receipt financing and bridging payment gaps between farmers and buyers.
"This partnership is unique in many ways," stated Prasanna Rao, co-founder and CEO of Arya.ag. "It marks GuarantCo’s first-ever transaction in the agritech space in India and their first collaboration with HSBC. The funds will help us deepen our services, enabling farmers to avoid distress sales and secure better returns for their produce."
Arya.ag’s approach focuses on tackling two key challenges faced by farmers and farmer-producer organisations: inadequate storage and lack of timely financing. The company's model integrates storage with financing, allowing farmers to access loans within 30 minutes of depositing produce at warehouses.
"This gives farmers the freedom to sell when market prices are favorable, avoiding distress sales," explained Rao.
The company claims near-zero NPAs (non-performing assets) over eight years of operating its NBFC, and its credit disbursements exceeded Rs 1,500 crore in FY24. Currently, 52% of loan disbursements are handled automatically by their technology platform, with minimal or no human involvement.
The platform has achieved a 2x annual growth in profitability, with Rao projecting another 2x increase for FY24-25 to over Rs 38 crore.
The company is also targeting an IPO by FY27.
Last year in October Arya.ag secured a $19.8 million DFC debt facility to boost its agri-commerce platform AryaTech. This followed Arya.ag’s $29 million pre-Series D equity funding round in July 2024, which was backed by Blue Earth Capital, Asia Impact, and Quona Capital.
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