By Gerelyn Terzo, Global AgInvesting Media
American farmers are in the brink of gaining broader access to flexible financing solutions as institutional capital continues to flow into the agricultural lending space. Private equity giant Carlyle Group is planting deeper roots in U.S. agriculture through a new $250 million partnership with FarmOp Capital, a St. Paul, Minnesota-based fintech lender that provides working capital to row crop farmers across the Midwest.
Through the deal, Carlyle gains a foothold in a growing segment of the ag finance landscape, one designed to provide flexible liquidity to farming operations facing volatile markets, rising input costs and increasingly volatile weather. With expanded access to capital, FarmOp will be able to broaden its reach among U.S. row crop producers and scale its lending capacity during a time of rising demand for non-traditional farm financing.
The investment will help FarmOp scale its platform, which lets crop producers tap into working capital by leveraging expected yields and insured or contracted revenues, sidestepping the need for land-based collateral. The model appeals to a broad swath of growers, especially younger and tenant farmers, who might not own land but need upfront financing for seed, fertilizer and other operating costs. Carlyle is acquiring FarmOp’s loans, likely at a favorable price, while reportedly gaining access to the startup’s innovative hedge structures, which leverage contracts like grain futures to shield against market losses, a strategic move in a volatile industry.
“The industry is going through a tough period,” Renick said. “Farmers can get into trouble when prices go down and they are not hedged,” according to FarmOp CEO Keir Renick cited by Bloomberg.
Founded in 2017, FarmOp Capital has grown quickly by offering credit solutions tailored to the seasonality and cash flow challenges unique to farming. Its tech-driven platform harnesses a combination of data analytics and proprietary risk models to underwrite loans and align repayment with crop sales. While the concept of revenue-based lending isn’t new, FarmOp stands out for its use of hedged positions in grain futures (think corn, soybeans, wheat) and credit options to buffer against commodity price volatility.
Carlyle Group is no stranger to the ag industry. The PE giant built a global irrigation platform, starting with a controlling stake in Italy’s Ocmis Group in 2022, followed by the 2023 launch of global irrigation platform Farmfront Group through acquisitions of European firms like Irrimec, Otech, and RKD to address water efficiency in farming. These moves, alongside a $2.2 billion global infrastructure fund raised in 2019 for a strategy that included ag-infra-related projects, underscore Carlyle’s long-term bet on bolstering supply chains and sustainability amid global food security challenges
According to USDA data, U.S. farm debt is on the rise, while estimates suggest this figure is projected to reach a record $561.8 billion in 2025, as the agricultural sector grapples with rising financial pressures. Meanwhile, working capital levels have tightened for many producers due to elevated interest rates and squeezed profit margins. By entering the space through FarmOp, Carlyle sidesteps the traditional farmland acquisition route in favor of a more liquid, data-driven exposure to crop production risk.
“We are thrilled to partner with FarmOp Capital, a differentiated platform in the agricultural finance space bringing together technology, credit discipline, and farmer-first innovation,” said Carlyle Head of Asset-Backed Finance Akhil Bansal. “This investment reflects our continued commitment to scaling asset-backed finance across specialized sectors, leveraging Carlyle’s structuring expertise and industry insight to support innovative platforms with high-quality, collateral-backed credit.”
FarmOp’s loan book currently includes farming operations with tens of thousands of acres across partners, with Carlyle’s capital expected to support significant growth. For an industry long underserved by traditional lenders, the partnership could mark a new chapter in how farmers access financing and how private capital flows into rural America.
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