Agri-fintech, Origo Commodities, will raise a debt funding of $20 million (Rs. 145 crore) from the U.S. government’s development finance institution, U.S. International Development Finance Corporation (DFC).
As a digital platform for agri stakeholders, Origo aims to provide procurement, warehousing support and trade finance to farmers and traders. The Gurugram-based company will utilize the fresh capital to build up capacity with agri producers and traders in the small and medium category and help them overcome the challenges posed by the outbreak of the COVID-19 pandemic. Origo will also work with the SMEs by providing them procurement support and financing to scale their volumes.
Leveraging its digital trade & finance platform, E-mandi, the company plans to facilitate better price discovery and seamless commodities trading. The platform enables a 100% secure online commodity trade that allows users to have better procurement, better pricing and better financing.
Agri-finance industry has an estimated market potential of up to $100 billion in primary and secondary trade. Despite the COVID-19 pandemic Origo’s business model has allowed it to increase the trade finance from Rs. 100 crores in FY 20 to Rs. 180 crores in FY 21 and now on track for Rs. 600 crores in FY 22 with 130 crores already done in Q1. E-Mandi platform will also facilitate non-funded trade of Rs. 350 crores.
Speaking on the development, Sunoor Kaul, Co-Founder, Origo Commodities, said, “At Origo, we have been working to improve the efficacy of the Indian agricultural commodity sector with our agri-fintech platform. Commodities are complex and our endeavour always has been to simplify the understanding and participation. We are elated to associate with DFC and hope the capital injection will benefit the agricultural sector in India, helping SME trade, avoidance of food wastage and mobilizing commodity for consumption and food security. We will utilize the funds to strengthen the sector that was battered by the pandemic and ensure it realizes its true potential.”
DFC’s guaranty is provided in line with the agency’s commitment to investing in projects that help grow agricultural businesses, strengthen value chains to reduce food waste, build critical food processing and storage infrastructure, and enable countries to expand food exports. The loan will be deployed through a local bank. The DFC guaranty will enable the bank to provide around Rs. 145 crore loan to Origo. The structure is significant as it helps in mobilizing local capital for Origo, and eliminates foreign exchange rate fluctuation risk from its balance sheet.
Setuka Partners LLP was the exclusive advisor to this transaction.
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