The round was led by Silicon Valley-based G2VP.
With a $100,000 grant from Cornell for coming up with the best entrepreneur proposal, he moved to L.A. in 2015 and went to work investing in a network of 400 farms to buy produce ahead of delivery. He estimates that 75% of the farms are located outside of the United States, including in Mexico, Chile and Peru.
“We invested in eight farms last week. We’ll easily hit 800 farms this year,” said Borquez Schwarzbeck, who grew up in Ciudad Obregon in northern Mexico hearing stories about how the Mexican government took his father’s farmland and home in the mid-1970s.
“My father was one of my biggest inspirations in life,” said Borquez Schwarzbeck, whose father in later years bought back the farm and added more than 5,000 acres of planted asparagus, grapes, avocados, celery, broccoli and cauliflower.
ProducePay sets itself up as a middleman between distributors, growers and grocers.
The company makes an investment in a farm and helps farmers find buyers. ProducePay earns a 2% commission on the crops it invests in, according to Borquez Schwarzbeck.
The company doesn’t just underwrite the farming risk, but the trading risk, which involves weather, logistics and the trustworthiness of the counterparties — both the farming side and the buyers’ side, he explained.
ProducePay also has developed an interactive online platform that tracks the market prices of hundreds of perishable fruit and vegetables, Borquez Schwarzbeck said.
ProducePay is essentially an underwriter of produce, he said.
ProducePay has financed more than $3 billon of produce across a dozen countries since its inception, but undertook $1 billion just last year due to the global pandemic and more people eating healthy.