Agritech platform Arya.ag that also provides loans to farmers, farmer-producer organizations (FPOs), and small agri-enterprises, has raised a $30 million (INR 2.5 billion) debt facility in collaboration with HSBC India and GuarantCo. GuarantCo, part of the Private Infrastructure Development Group (PIDG) and funded by the governments of the UK, Switzerland, Australia, and Sweden, offered partial guarantees to HSBC India for the loan.
Expanding Access to Post-Harvest Liquidity
The funds will primarily be used to address post-harvest financing gaps, enabling farmers and FPOs to avoid distress sales and benefit from better price realizations for their produce. Arya.ag aims to mitigate the widespread practice of forced sales immediately after harvest when prices are at their lowest.
Prasanna Rao, co-founder and CEO of Arya.ag, highlighted the collaboration’s importance, describing it as a step toward addressing systemic inefficiencies in agricultural supply chains.
“This facility enables us to pay sellers on behalf of buyers, ensuring that transactions are seamless and timely. Farmers and agri-enterprises can store their produce and sell it later when prices appreciate, often earning 20-30% higher returns,” said Rao.
In addition to bridging payment delays, the funds will support warehouse receipt financing, which allows farmers to access short-term credit by leveraging stored produce as collateral. This dual approach seeks to improve liquidity in rural markets while giving farmers greater control over when and how they sell their commodities.
Integrated Model of Storage and Financing
Arya.ag operates at the intersection of storage and financing, addressing two major pain points for farmers: the lack of adequate post-harvest storage infrastructure and the absence of timely credit. The platform provides scientific storage facilities near farms, significantly reducing post-harvest losses that often exceed 7% when crops are improperly handled or stored.
Once farmers deposit their produce at these warehouses, they can access loans within 30 minutes through Arya.ag’s technology platform. The system evaluates the quality and value of the stored commodities, calculates the loan eligibility, and disburses funds directly to farmers’ accounts. This integration of storage and financing enables farmers to wait for favorable market conditions before selling their crops, effectively disrupting traditional cycles of distress sales.
Also read: Arya.ag: The Agritech Startup Revolutionizing Indian Agriculture with AI and Digital Solutions
Automation and Operational Efficiency
Arya.ag’s operations are increasingly driven by technology. Currently, 52% of loan disbursements are automated, requiring minimal human intervention. This figure is expected to rise to 75% in the next year, further reducing operational costs and improving efficiency. The platform’s automation capabilities allow it to quickly assess grain quality, process loans, and transfer funds, ensuring swift and transparent transactions.
Over its eight years of operation, Arya.ag has maintained near-zero non-performing assets (NPAs), a rare feat in agricultural lending. In FY24, the company disbursed over Rs 1,500 crore in credit and is projecting a 2x increase in profitability for FY24-25, targeting Rs 38 crore.
Positioning for Growth and Market Expansion
While Arya.ag’s primary focus is on non-perishable commodities like grains, it is also exploring solutions for perishables such as jaggery. Approximately 30% of its current client base is concentrated in Bihar, a key agricultural state. The company plans to expand its reach by enhancing its technological capabilities and strengthening its asset-light model.
Arya.ag’s co-founder Rao noted that the platform’s embedded finance model is central to its growth. “As our scale increases and our creditworthiness improves, we can lower borrowing costs and pass these benefits on to farmers while maintaining profitability,” he said.
Future Outlook and Funding Milestones for Arya.ag
The $30 million debt facility builds on Arya.ag’s recent funding achievements. In October 2024, the company secured $19.8 million in debt financing from the U.S. International Development Finance Corporation (DFC). This followed a $29 million pre-Series D equity funding round in July 2024, led by Blue Earth Capital, Asia Impact, and Quona Capital.
Looking ahead, Arya.ag plans to maintain its growth trajectory while preparing for an initial public offering (IPO) by FY27. The company aims to strengthen its position in the agritech sector by continuing to focus on profitability and technological innovation.
This latest debt facility reflects the increasing interest of global financial institutions in supporting India’s agricultural sector, a critical component of the country’s economy. As Rao concluded, “We are building an ecosystem where storage, financing, and market linkages come together to create long-term value for all stakeholders.”
