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Rabobank and Caspian launch structured financing facility for agtech start-ups

Rabobank and Caspian together set up a INR150m [2.1 million USD] Rabo-Caspian Agtech Financing Fund that will provide customized debt solutions to companies operating in the Agtech space for the first time in India. The fund specifically is interested in data-driven AgTech companies that deliver products and/or services that facilitate smallholder farmers in improving their productivity and income. The fund also aims to provide growth finance to start-ups who are using the opportunity created by developments in data availability and technology to address critical problems of the food & agriculture sector.

Technological developments have created an opportunity to leverage data and technology to address issues in the agriculture sector, specifically those faced by smallholders. For example the availability of mobile and internet connections in rural areas, penetration of smartphones/tablets, cloud-based internet services, remote sensing possibilities and open data sources.

Several start-ups that have come up in India are capturing and analyzing a variety of data sets that include everything from soil health to satellite images to assess crop risks and productivity analytics to digitized quality assessment of farm produce. In addition, there is a growing list of new generation Financial Service Providers (FSP), who are using data analytics to segment farmers and provide efficient credit, payment and wallet services, as well as insurance to smallholder farmers through their technology-enabled platforms. These start-ups have the ability to address significant issues in the agriculture supply chain, and solve problems especially for the smallholder farmers.

Limited access to debt solutions
While some of these start-ups have proven solutions, significant revenue traction and paying customers, many of them are still at a stage where they are dependent on angel/venture capital money, and are not able to raise mainstream debt because they do not have assets to offer as mortgage collateral or because their profitability is yet to be established due to their conscious focus on growth or just because they are growing very fast and traditional sources of debt can’t keep pace. Rabo-Caspian Agtech Financing Fund aims to address this gap by providing timely, collateral-free, cash-flow matched structured debt products to agri start-ups who are harnessing technology to provide efficient solutions. This is the first such structured debt product in the Indian market for the agtech innovators.

“We are delighted to partner with Caspian to introduce the first such solution for the agtech companies in India. Caspian brings in strong origination & underwriting skills along with deep understanding of local agriculture/technology markets. Rabobank complements this with balance sheet support, global networks and knowledge of agriculture/innovations in line with the bank’s mission of ‘Growing a better world together”, said Arindom Datta, Executive Director, Rural & Development Banking/Advisory.

“It’s a great time to be an agri-entrepreneur as data and technology revolution grips the agriculture sector in India. It is only fitting that Caspian, a leading debt provider for impact sectors partners with Rabobank - the world’s largest Food and Agri-business focused bank to create this first-ever funding facility to support new age agri-entrepreneurs. We look forward to providing customized debt solutions to viable agri-tech enterprises to scale, sustain and impact smallholder farmers.” said Avishek Gupta, Investment Director, Caspian Impact Investments Private Ltd.

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