Lithuanian fintech marketplace for agriculture loans, HeavyFinance, provides financing to small and medium-scale farmers in Europe. Now, the alternative lending platform for agriculture has raised $1 million in a pre-seed funding round.
Expansion to Poland
The investment round was led by Black Pearls VC along with funds from bValue and Startup Wise Guys. Also, angel investors, including Marius Krikštopaitis and Adrian Watson participated in the round. HeavyFinance will use the funds to scale the team and support faster expansion in existing markets and tap into Poland.
Laimonas Noreika, CEO of HeavyFinance, said: “A new generation of farmers is waiting on the sidelines, ready to transition to agricultural models that are kinder to nature. Unfortunately, up until now, access to finance has been a major barrier. There is an outstanding gap in financing for small and medium farms in Europe and a robust investor appetite for high-yield investment products. HeavyFinance is here to address both needs.”
Wojciech Drewczynski from Black Pearls VC said: “We are very excited to be helping HeavyFinance on its journey to become the go-to-financing platform for European farmers. With an experienced team that has grown a number of successful startups, HeavyFinance is well placed to step in and solve an enormous pain point for farmers.”
“We strongly believe that farmers like many other groups are moving online very fast and need seamless solutions that support their businesses, like HeavyFinance” – said Maciej Balsewicz from bValue VC.
Seamless shift to sustainable practices
Founded in 2020 by Laimonas Noreika, HeavyFinance helps European farmers automate processes and shift to more sustainable means of agriculture. The company is regulated as a crowdfunding platform operator by the Central Bank of Lithuania. Also, it is fully prepared for the upcoming revision to EU regulations.
The HeavyFinance loan marketplace matches investors and farmers to provide access to finance for agricultural businesses. It offers short-to-medium term financing ranging between €6k and €300k to farmers struggling to receive loans from conventional lenders.
Already, HeavyFinance has facilitated over €13.5 million in agriculture loans in Bulgaria, Latvia, Lithuania and Portugal. It has helped over 400 farmers who own more than 45,000 hectares of land switch to more sustainable agricultural practices.
In the EU, agriculture is the biggest producer of greenhouse gas emissions trailing behind the energy sector. It is important to bring about automated processes and switch to sustainable agricultural practices to reduce greenhouse gas emissions from this industry. Despite this, small and medium farmers fail to get the necessary finance to bring about this much-needed automation.
Traditional financial institutions are often unable to issue small business loans to farmers due to capital adequacy requirements and other factors. As per a Fi-Compass report by the European Commission, the total market gap in the European Union is between €19.8 to €46.6 billion.
HeavyFinance aims to bridge this market gap by providing short-to-medium term financing solutions for all farming needs, including equipment, land, and working capital loans. Usually, traditional investors do not invest in these additional aspects. Some notable rivals of HeavyFinance that also invest in agriculture and farming include AgriFi, LendSecured, and others.
Earn for adopting sustainability
Also, HeavyFinance offers more favourable loan conditions to farmers opting for more sustainable agricultural practices, including the purchase of less polluting equipment, a move to soil sequestration and no-till farming projects. It also focuses on sustainability in all future activities.
The investor-to-farmer marketplace does not turn a blind eye to farmers as it realises that every loan will be used to help facilitate a complete and total transformation to sustainable farming practices. Furthermore, the company has plans to help farmers generate carbon credits that can be sold.