IIF, an Australian investment platform that connects farmers with consumers, will roll out across Canada after new funding from Verdex Capital, a firm focused on food and agriculture. Verdex is IIF’s first Canadian investor; existing backers AgFunder and Investible also took part in the round. AgFunderNews disclosed that its parent company AgFunder is an investor in IIF.

The company describes its service as a way to let everyday people invest in farmers and what they produce without owning a farm. Through an app, a user can put money into a beehive, a single cow, a basket of oysters or an acre of canola and follow the investment through the season. The money covers the producer’s costs and, depending on the season, returns a profit to the investor.

For farmers, the point is liquidity and risk management outside traditional agricultural lending. “It’s a way of expanding their capital base without triggering any other covenants or ratios for their lending,” Verdex CEO Collin Phillip told AgFunderNews, adding that a farmer with a successful IIF crop could then take on further finance from an existing bank.

Verdex, whose portfolio includes ag biotech company Ichor Ag and crop management system Picketa, says IIF is one of the few companies it backs that can reach farmers across the whole country, from row crops and greenhouses to seafood. Canada’s agricultural sector employs more than 2 million people and accounts for around 7 per cent of GDP, and Phillip said climate change, tariffs and trade disputes have made farm incomes more vulnerable. Innovation on the farm, he argued, is impossible without capital to pay for it, and IIF could give growers the means to trial new technology or practices that a conventional loan would not cover.

Phillip also sees value in the link between producers and consumers. “There really is no other vehicle for someone in downtown Calgary to invest in farming,” he said. “This is as close as you can get to investing alongside the farmer themselves.”

IIF recently won regulatory approval in New Zealand and continues to grow in Australia. Founder and CEO Nathan McPhee, who has moved to Calgary for the expansion, said Canada resembles Australia in its high urbanisation and its large, increasingly volatile commercial farm sector. “We proved the model in Australia. What we’re demonstrating in Canada is how rapidly it can be replicated in a new market,” he said.

Both men described Canada as a softer landing than the United States for a start-up entering North America. Phillip said the aim is to bring the tool to Canadian producers sooner rather than treat the country as an afterthought market. For farmers everywhere, the model is worth watching as a way of financing a season from the public rather than the bank.

Source: AgFunderNews