Mexico is a world leader in the production and export of avocados: every year it markets two million tons of fruit. However, this production demands a lot of capital and the supply of financing is limited. Establishing one hectare requires more than 81,000 pesos and its maintenance costs more than 108,000 pesos, while its estimated profit stands at 47,000 pesos, according to data from Instituted Trusts in Relation to Agriculture (FIRA).
In this scenario, Francisco Escobar detected a business opportunity and founded AVO Oro Verde, a start-up that seeks to democratize access to avocado investments, through the sale of shares of orchards it acquires. The business model consists of three pillars: the search for investors in Mexico and Europe who are willing to finance production, the operation of the investment fund that brings together the capital obtained, and the injection of resources in the orchards that AVO purchases from producers.
In October 2018, Escobar created the impact investment company that gave a name to the first private fund specialized in avocado.
The company created a fund so that family offices abroad can acquire shares of the orchards. So far, about 100 people have been interested in the model.
"It is no longer necessary for a person to have a million dollars to buy an orchard, he only needs to invest 400 dollars, which is the price of an action," Escobar added. According to the specialist, this also brings liquidity to the fields, especially for small producers -80% of the gardens in Michoacán are less than five hectares, according to FIRA- and allows sharing maintenance costs among several investors.
Source: expansion.mx
