green labSeoul-based agritech startup has secured $38.4 million (50 billion won) in debt financing from existing investors. BRV Capital Management and Skylake IncavestThe new funding comes just a month after the startup laid off about 70% of its workforce, or 350 people, in February as part of a restructuring.
Green Labs CEO Sanghoon Shin said in an interview with TechCrunch that the company now has 150 employees, and that the company’s selling, general and administrative expenses (SG&A) are down by about 80% compared to the end of 2022. added.
The startup has built smart farming software and hardware to help farmers digitize the entire agricultural value chain, from crop to distribution. Singh said the company’s “Farm Morning” app aggregates farm data, artificial intelligence provides insights into crop lifecycles, and it also provides a network where farmers can connect and share insights.
Currently, 900,000 farmers in South Korea are using the app, a number that has tripled in the past 12 months since its launch in 2021, Shin said. He also runs Sinsun Market, a B2B marketplace, and has ambitions to become his LinkedIn for farmers, Shin added.
Green Labs, which raised $140 million in Series C in January 2022, ran out of money after overstretching its expansion, TechCrunch reported last month. This time, Singh explained what happened to the company and how it plans to revive. The main reason for this is the new service, accounts receivable factoring, also known as an invoice discount. Green Labs buys produce from farmers and sells to buyers/B2B partners with outstanding invoices. In other words, startups pay farmers and buyers early and receive money from them later. According to Shin, the company has thousands of his B2B partners.
The problem arose when the South Korean bond market froze late last year. default theme park legolandFinancial institutions have begun to stop factoring loans on accounts receivable as market uncertainty increases.
Green Labs borrowed money against margin sales for cash liquidity, but its lender, Lotte Card, stopped factoring loans late last year. Startups had to pay off huge loans all at once. GreenLabs has had to go through restructuring and layoffs.
Singh said the company will generate about $77 million in sales in 2021 and more than $230 million in 2023.
The new funding will be used to advance the Farm Morning app and expand operations in South Korea and Japan, Shin said. It already has 300,000 users. When asked about the invoice discount service, Shin said Green Labs will continue to act as an intermediary between farmers and buyers, but will manage the business in a more conservative manner.
Its global peers include Dehaart and Farmers Business Network.
After the last round of funding, two of the company’s investors, BRV Capital Management and Skylake, became Green Labs’ largest shareholders, with the rest owned by other investors, including SK Square and Shin.
