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Elyssa Lopez · · 5 min readVN startup banks on co-ops to defy agritech skeptics
When Vietnam-based agritech firm TechCoop dropped news of its US$70 million series A raise in February, eyebrows went up — after all, peers like eFishery and TaniHub hit rough waters recently.
But investors appear to be rallying behind the three-year-old startup, which was founded in 2022 by Hao Diep, a former executive at Vietnam’s agriculture major Nafoods Group.
TechCoop, which offers trade credit financing for farming cooperatives, claims it’s already profitable and is projecting to make US$250 million in annualized revenue by 2025 and US$400 million by 2026.
Vietnamese farmers in the Mekong Delta/ Photo credit: xuanhuongho/Shutterstock
“TechCoop doesn’t compete with banks, we complement them,” says CEO Diep in an email interview with Tech in Asia. “Some banks have already started to inquire about using our data to grow their exposure to the agriculture sector.”
No direct farmer lending
TechCoop isn’t reinventing the wheel.
Many farmers can’t afford to pay upfront for essential agricultural inputs like seeds and fertilizers to kickstart production. So, some Vietnamese banks also offer unsecured loans for farmers of up to 200 million dong or US$7,800. But the application process can be complex and cumbersome.
TechCoop serves as the middle ground between formal financial providers and small agriculture firms, cooperatives that need access to working capital for either their daily requirements or for expansion efforts.
The startup partners with local banks to finance the credit. To identify credit terms for cooperatives, it tracks and verifies their transactions with farmers, suppliers, and buyers through its platform.
The leadership team of TechCoop/ Photo credit: TechCoop
It’s akin to the SME invoice financing product offered by fintech firms such as Validus and First Circle, but in this case, TechCoop is mostly working with agricultural cooperatives.
“As a trader, we do not charge interest. We earn gross margins from buying and selling agricultural products,” says Diep, adding that gross margins typically range from 5% to 12% per transaction.
This cooperative-based model – instead of direct farmer lending – boosts the startup’s operational efficiency, says Charles Wong, partner at TNB Aura, which led TechCoop’s series A round.
Potential speed bumps
“Real profit” and transparency
