Fintech using blockchain to tokenize credit securities aims to establish the fund by the end of July and has an initial investment of R$20 million through the ‘Family and Friends’ model.

Tiago Piassum: An Entrepreneur Energizing Brazilian Agribusiness with Blockchain Technology. A native of Rio Grande do Sul, is a natural entrepreneur brimming with energy. Previously the owner of an investment consultancy, he is now dedicated to a more ambitious project: accessing foreign investors and using blockchain technology to finance Brazilian agribusiness through tokenization.

In early 2023, Tiago founded the fintech Rivool Finance alongside another bold entrepreneur, 27-year-old investment advisor Lorrayne Viana, the daughter of small rural producers from Espírito Santo. The company is headquartered in Florianópolis, Santa Catarina. Other friends and partners soon joined the startup’s mission. One recent addition is Fernando Fegyveres, a well-known figure on Faria Lima Avenue, who was an executive at Itaú BBA and the former CEO of Voiter Bank (formerly Indusval).

In an interview with AgFeed, Tiago, and Lorrayne shared that they recognized early on the difficulties medium-sized rural producers face in accessing credit to expand their businesses. “I saw that medium-sized producers needed credit. You tried to originate it, but there were barriers because often the size of the requested credit was incompatible with the bank’s minimum check amount,” says Tiago Piassum, CEO of Rivool Finance.

He observed that the volume of international investments in private credit in Brazil had been “flat” for the past ten years. To understand the reasons for the lack of interest, he spoke with managers and discovered that one reason was the bureaucratic difficulty for foreigners to open accounts in Brazil, with long timelines and high costs. “We saw that only international banks with local structures were operating here, but 90% of the money goes to 12 companies. So, the ‘middle market’ really can’t access this external capital,” he states.

The partners at Rivool have been traveling to different countries, primarily Switzerland and the United States, to find a way to facilitate this “connection” between foreign capital and credit for Brazilian rural producers. The fintech believes that by connecting these points in their marketplace and offering tokens to foreigners, “we will improve the experience and flow for them, who will no longer need a bureaucratic international account.”

The asset offered to investors is generated from securities such as CRAs (Agribusiness Receivables Certificates) or CPRs (Rural Product Notes), which are transformed into tokens.

Fiagro Launch in July

Rivool’s partners decided to launch a Fiagro in Brazil to gain credibility and sell products to foreigners. Current regulations in the country do not allow tokenization of these funds, so the idea is not to have international investors directly in Fiagro. However, it will serve as a “passport” for the fintech. The project was designed in partnership with Ecoagro and Machado Meyer, which acts as an incubator for Rivool.

“Foreign investors don’t have a mandate for a thesis without an existing fund, without a running product. When we went to market at the end of last year, many said to create the first fund and then come back, and we’ll sign the mandate,” says Piassum. He notes that during visits to Switzerland, New York, Boston, and Madrid, everyone said they would only consider agribusiness in Brazil, rarely real estate.

According to Rivool’s CEO, the Fiagro offer is expected to open next week and close by July 31. With capital from friends and partners, they aim to raise R$50 million, with R$20 million already secured. “The first offer will be in-house; it will be a mirror.”

After Fiagro is operational, Piassum plans to resume overseas ventures with partner Fernando Fegyveres. “We will have an extensive agenda to raise $100 million in five checks of $20 million each,” he revealed.

Rivool’s revenue model will be based on fund management fees and credit structuring fees. “In this year and a half, with 12 people, it’s all self-investment.” To originate rural producer credit, the fintech is forging partnerships with cooperatives, agribusinesses, and agtechs.

In conversation with AgFeed, partner Lorrayne Viana also expressed enthusiasm about Rivool being selected for Select USA, a U.S. program that brings together large corporations and government entities to hear startup technology proposals. “Our partner Felipe Sena, who is based in Boston, will represent us. It’s essential because we will be one step closer to the U.S. government. Many funds will be there hearing about the thesis and may be interested in getting closer,” she said.

The expectation is that up to 2.5% of the assets under management will become Rivool’s future revenue. The two partners say one of their inspirations is Credix, a Belgian company that funds fintechs and also uses blockchain, though not in agribusiness.

“Our platform is already developed, our contract management solution is ready, and our algorithm and the legal part to carry out transactions are in place. We need to work outside of Brazil, focusing on sales,” concluded Piassum. He mentioned that while they do not rule out raising funds in Brazil, it is separate from their business plan.

Read the full article here.

Translated by the Rivool Finance team.