Brazil Credit Fintech TerraMagna Raised $40 Million Led by Softbank in Its First Entry into Farming

This marks SoftBank’s first agriculture-related investment as TerraMagna raised $40 million from its Latin America Fund

Brazilian credit rural Fintech TerraMagna said on Wednesday (12) it raised $40 million in debt and equity funding in a round led by Softbank Group International Latin America Fund and Shift Capital to expand its regional presence and diversify its offering of financial products.

TerraMagna, which offers loans in partnerships with distributors and industries that already have a long-term local relationship with small and medium-sized farmers, did not give details on its valuation. But the company said that its credit portfolio reached $120 million last year, more than 10-fold higher than in 2020.

Bernardo Fabiani (CEO) and Rodrigo Marques (COO), co-founders of TerraMagna, are experienced entrepreneurs coming from the world renowned technological institute and hub of Brazil, ITA – Instituto Tecnológico da Aeronáutica, with Marques being an alumni himself of the MIT – Massachusetts Institute of Technology.

This is the first time SoftBank is investing in a company with farming-related activities but it doesn’t seem to be the last, knowing the ability of the Japanese conglomerate to identify underfunding sectors and industries.

The farming sector of Brazil has always been dependent on bureaucratic governmental financing and on the traditional private landing industry which is technologically deficient specially to validate credit worthiness and setup collaterals (on this subject, see Agrolend Raises $14 Million All-Equity Series A Led by Valor Capital).

That is where TerraMagna shines with its sophisticated tech model which uses a host of data sources to underwrite a farming loan such as satellite imagery, climate data, governmental data regarding environmental certifications and guidelines. This technological advantage gives the company the ability to provide for faster, less expensive, and secure financial products to the farming industry.

Fabiani and Marques launched TerraMagna in 2017 and by 2019 they had conceived the current model. The company has 110 employees, and as TerraMagna raised its $40 Million it plans to use the funding to grow even further TerraMagna’s technological advantage and increase its sales team.

The Esquires and the Firms Behind the Deal

Foley & Lardner LLP acted as U.S. legal counsel to TerraMagna. 

Silicon Valley partner and Latin America specialist,  Andre Thiollier represented TerraMagna and led Foley’s legal deal team with Palo Alto’s corporate associate Ethan Floyd. 

The Am Law 50 Foley & Lardner is a US-based full service global law firm with over 26 offices around the globe.

Bronstein Zilberberg Chueiri Potenza Advogados  acted as Brazilian legal counsel to TerraMagna.

Partner Guilherme Potenza led the Bronstein Zilberberg’s transaction team with the contribution of corporate associate Amanda Iranaga. 

The Top Ranked Chambers Brazil 2022 Bronstein Zilberberg Chueiri Potenza Advogados is a full service law firm based in São Paulo, and it is highly recognized as one of the leading top-tier M&A Venture Capital law firms in Brazil.

Other Firms Behind the Deal

Winston & Strawn acted as U.S. legal counsel to Softbank and Shift Capital with Chicago partner Benjamin D. Kern leding the firm’s deal team.