The agro-financial industry has an estimated market potential of $ 100 billion in primary and secondary trade.
Agri-fintech, Origo Commodities, will raise debt financing of $ 20 million (Rs. 145 crore) from the US government’s development finance institution, the US International Development Finance Corporation (DFC).
As a digital platform for agricultural stakeholders, Origo aims to provide sourcing, warehousing and trade finance support to farmers and traders. The Gurugram-based company will use the new capital to build the capacities of agricultural producers and small and medium-sized traders and help them overcome the challenges posed by the outbreak of the COVID-19 pandemic. Origo will also work with SMEs by providing them with sourcing support and financing to increase their volumes.
By leveraging its digital trading and financing platform, E-mandi, the company plans to facilitate better price discovery and transparent commodity trading. The platform enables 100% secure online product trading which enables users to have better shopping, better prices and better financing.
The agro-financial industry has an estimated market potential of $ 100 billion in primary and secondary trade. Despite the COVID-19 pandemic, Origo’s business model has allowed it to increase trade finance from Rs. 100 crore in FY 20 to Rs. 180 crore in FY 21 and now on track for Rs. 600 crores in fiscal year 22 with 130 crores already made in the first quarter. The E-Mandi platform will also facilitate unfunded trading of Rs. 350 crore.
Speaking on the development, Sunoor Kaul, co-founder of Origo Commodities, said: “At Origo, we have been working to improve the efficiency of India’s agricultural commodities sector with our agro-fintech platform. Commodities are complex and our effort has always been to make it easy to understand and participate. We are delighted to partner with DFC and hope that the capital injection will benefit the agricultural sector in India, helping SME trade, avoiding food waste and mobilizing commodities for consumption and food security. We will use the funds to strengthen the sector that has been affected by the pandemic and ensure it achieves its true potential. “
DFC’s guarantee is provided in accordance with the agency’s commitment to invest in projects that help develop agricultural businesses, strengthen value chains to reduce food waste, build critical processing and storage infrastructure of food and enable countries to increase their food exports. The loan will be deployed through a local bank. The DFC guarantee will allow the bank to provide approximately Rs. 145 crore loan to Origo. The structure is important because it helps raise local capital for Origo and removes the risk of exchange rate fluctuations from its balance sheet.
Setuka Partners LLP was the exclusive advisor of this transaction.