Arya.ag Secures $30M debt facility from HSBC backed by GuarantCo

Agritech and lending platform Arya.ag has secured Rs 250 crore or $30 million debt facility in collaboration with HSBC and GuarantCo, a financial institution under the Private Infrastructure Development Group (PIDG).

GuarantCo, funded by governments of the UK, Switzerland, Australia, and Sweden, provided two partial guarantees to HSBC India for the loan given to Arya.ag.

"This partnership is unique in many ways," stated Prasanna Rao, Co-founder and CEO of Arya.ag, during the announcement. "It marks GuarantCo’s first-ever transaction in the agritech space in India and their first collaboration with HSBC. The funds will help us deepen our services, enabling farmers to avoid distress sales and secure better returns for their produce."

The funds will be allocated to warehouse receipt financing and bridging payment gaps between farmers and buyers. "We’re creating trust by stepping in to pay sellers on behalf of buyers, ensuring a seamless transaction cycle," added Rao.

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Arya.ag’s approach focuses on tackling two key challenges faced by farmers and farmer-producer organisations: inadequate storage and lack of timely financing. By establishing scientific storage solutions closer to the farm gate, the company has significantly reduced post-harvest losses, which often exceed 7% when produce is improperly stored. This ensures better quality and enhances the marketability of grains.

Their model integrates storage with financing, allowing farmers to access loans within 30 minutes of depositing produce at warehouses. "This gives farmers the freedom to sell when market prices are favorable, avoiding distress sales," explained Rao.

The combination of storage and quick access to liquidity has created a self-sustaining ecosystem, Rai said. Certified grain attracts buyers, including millers and corporates, whose participation draws more farmers and aggregators to the platform. This "loop of infinity," as Rao describes it, has improved market linkages.

The company boasts near-zero NPAs (non-performing assets) over eight years of operating its NBFC, and its credit disbursements exceeded Rs 1,500 crore in FY24.

Currently, 52% of loan disbursements are handled automatically by their technology platform, with minimal or no human involvement. This means that when a farmer deposits their produce in Arya’s warehouses, the system can quickly assess the grain's value, calculate the eligible loan amount, and disburse the loan directly to the farmer's account. This figure is expected to rise to 75% in the coming year, further reducing operational expenditure, as per Rao.

The platform has achieved a 2x annual growth in profitability, with Rao projecting another 2x increase for FY24-25 to over Rs 38 crore.

"Embedded finance is integral to our business," said Rao. "As our scale grows, and creditworthiness improves we’re able to lower borrowing costs, passing these benefits to farmers while maintaining profitability."

Looking ahead, Arya.ag plans to maintain its asset-light model while exploring innovations in tech-enabled solutions. The company is also targeting an IPO by FY27, aiming to list on the main board. “We’re focusing on becoming a sizable player with a compelling story for investors,” Rao shared.

Last year in October Arya.ag secured a $19.8M DFC debt facility to boost its agri-commerce platform AryaTech. This followed Arya.ag’s $29 million pre-Series D equity funding round in July 2024, which was backed by Blue Earth Capital, Asia Impact, and Quona Capital.