FarmFolio, an ag crowdfunding platform targeting accredited investors, is aiming to offer liquidity to backers of projects it lists by launching a secondary-market app.
Founded in 2014, the Colombia-based company has already sponsored two projects: a Colombian diversified venture that covers coconut growing, cattle grazing and teak; and a Panamanian pineapple plantation. Investors seeking to participate have been offered to buy “farm shares” in limited-liability companies that remain private.
The platform is now looking to make such shares more akin to their public peers by allowing existing investors to resell some or all of their units. A “secondary-market” app is to be launched next week, operations manager Oscar Baracaldo told Agri Investor.
“FarmFolio has been a proof of concept of how a sponsor can operate and help collect funds for projects in foreign entities,” he said. The platform, whose members typically acquire a controlling share of the farming operations it lists, acts as the first investor in each venture by providing seed capital.
In the first phase of the Colombian project, FarmFolio garnered a total $2.5 million. It is now seeking $5 million to fund the farm’s expansion, 75 percent of which has already been secured, Barcaldo says. It has also raised 60 percent of the money needed for the Panamanian pineapple venture. It expects a 20.74 percent average yield over the duration of the former scheme, and a 10-year average yield of 18.67 percent on the latter.
Newbies and new bees
About 80 percent of FarmFolio’s members are based in the US, while 5 percent are located in Canada. The balance is split between Europe and Asia. “What has been very interesting to us is that 70 percent of our investors have never invested in agriculture before,” Baracaldo said. “They’re trying to diversify themselves, and agriculture is the perfect medium to do it.”
Eventually, FarmFolio’s aim is to become a marketplace rather than the main sponsor of projects. In the long-term, Baracaldo describes the company as a “sponsor forum” where those looking for capital would list their projects while existing investors could unlock cash when wanted by reselling units.
In the shorter-run, though, FarmFolio is looking for its next ventures. Those may include grapes and pomegranate in Peru, some opportunities in Chile and the US, and Colombian natural honey. “It’s become very profitable here in Colombia.”
Where the project company is domiciled will vary. While FarmFolio’s debut venture is incorporated in Delaware, the Panamanian pineapple venture is domiciled in the Cayman Islands. “The European crowd, investors from Asia also, they told us that they loved the project but preferred not to invest through a US entity. They’d rather go through Cayman or Luxembourg,” Baracaldo noted. “We’ve been able to raise much faster doing it this way.”
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