Digital Agriculture in LMICs - 24 Jan #44
In India, AquaExchange raises $6M, in Kenya, Shamba Pride secures $3.7M; African Development Bank and EIB Global support new fund for impact-driven startups
17/01/24
Seedstars Africa Ventures I fund gets backing from EIB, AfDB, plans to invest in agritech
Early-stage venture capital fund Seedstars Africa Ventures I has raised USD 30 million from EIB Global, a specialised arm of the European Investment Bank (EIB) dedicated to increasing the impact of international partnerships and development finance. An additional USD 10.5 million investment has also been announced by the African Development Bank. Through the fund, Seedstars Africa Ventures (SAV) intends to make initial investments (Seed+ and Series A rounds) ranging from USD 250,000 to USD 5 million in impact-driven startups across Africa, including in sectors such as agritech. SAV aims to address funding gaps in the region, and plans to provide 50% of funding to francophone Africa. For the future, it aims to onboard to the fund both African and foreign investors to reach its USD 80 to USD100 million target size. The fund has already invested in fours startups including agritech Shamba Pride in Kenya (see other article in today’s edition), a tech-enabled retail franchise network for agroservices and input distributors.
18/01/24
World Bank approves $200M financing for food security, digital advisory in Senegal
The World Bank announced the approval of USD 200 million financing from its International Development Association (IDA) arm to support the third phase of the Food Systems Resilience Program (FSRP-3). The program aims to increase preparedness against food insecurity and improve the resilience of food systems in Senegal, targeting 600,000 people - 40% of whom will be women - including crop and livestock farmers, processors, and members of agricultural micro enterprises. FSRP-3 will help establish digital advisory services to enhance the effectiveness of agriculture and food crises prevention and management, and to strengthen the capacities to adapt to climate change. It will also strengthen Senegal’s agricultural research systems and its policy environment to improve food production, provision of ecosystem services, protection of biodiversity, and local livelihoods. The program involves the participation of regional institutions such as the Economic Community of West African States (ECOWAS) and the West and Central Africa Council for Agriculture Research and Development (CORAF).
19/01/24
India’s AquaExchange gets $6M to scale up aquatech solution
Indian aquatech startup AquaExchange has raised USD 6 million in a Series A investment led by Ocean 14 Capital with participation from existing investors including Endiya Partners and Accion Venture Lab. Founded in 2020, AquaExchange is an aquatech/fintech serving shrimp and fish farmers. Its solution comprises an IoT module to monitor ponds, farm automation (solar powered feeding system), financing and market linkages for inputs and outputs. The startup has a mobile application and a proprietary technology platform developed using Machine Learning techniques. The solution helps farmers increase crop yields, mitigate crop risks and combat rising input costs. The data collected by the AquaExchange system is also leveraged by B2B buyers in the value chain for market intelligence, while financial service providers can use it to build robust credit models. The funding will be used to scale up the solution in India.
This is the first aquatech investment in LMICs in 2024. In 2023, aquatechs globally raised a total of USD 217.05 million resulting from four deals, including one in Africa (Aquarech), one in Vietnam (Tepbac), and two in Indonesia, comprising Jala and eFishery’s Series D USD 200 million deal, making the company the first agritech unicorn in the country.
21/01/24
Kofi Annan Foundation to support digital ag solutions for food security in Africa
The Kofi Annan Award for Innovation in Africa, now in its second edition, is looking for social enterprises across Africa with technology-powered solutions that contribute to SDG 2, Zero Hunger, with a strong focus on achieving food security and improving nutrition. Innovations should address one or more of the following priority topics: inclusion of marginalised groups in food security; enhanced nutrition for women; circular solutions and reduction of post-harvest losses. The Award is supported by the Austrian Federal Chancellery, in collaboration with the United Nations World Food Programme - WFP Innovation Accelerator, the Austrian Development Agency and the Kofi Annan Foundation. Up for grabs are three grants for social of EUR 250,000 (USD 271,000) from the Austrian Development Agency. There is time to apply until 8 February.
22/01/24
Kenya’s Shamba Pride bags $3.7M to expand market linkage platform
Kenyan agritech Shamba Pride has raised USD 3.7 million in a pre-series A round. The funding comes from the EU agriculture financing initiative (EDFI AgriFI) and Seedstars Africa Ventures (SAV). According to reports, it includes a mix of debt and equity (USD 1.7 million in equity). In 2021, the agritech raised USD 1.7 million from SAV and Gray Matters Capital. Established in 2016, Shamba Pride is a “phygital” market linkage platform connecting input manufactures, agri- retailers and farmers. Its DigiShop market, which is available on a mobile App, USSD and web platform, brings seeds, fertilisers, agrochemicals, animal feeds, mineral supplements and farm tools to agri retailers and farmers. In addition to market linkages, the startup offers Buy Now, Pay Later (BNPL) financial services, and extension services. According to its website, Shamba Pride has onboarded 60,000+ registered farmers and 2,700 agri-retailers across 24 counties in Kenya. The startup plans to use the funding to expand its footprint to more retailers in Kenya and to eventually expand internationally. Target markets include Tanzania, Uganda, and Zambia.
Photo credit: Shamba Pride
23/01/24
Kenyan agri e-commerce Twiga to resolve liquidation threat
Kenyan B2B agri e-commerce company Twiga Foods has reached an agreement with Incentro Africa to resolve a dispute over a debt related to its use of Google Cloud Services. Incentro is a cloud services vendor and a Google services reseller, and provided the services under the Google Partners Programme. Last September, Incentro filed a USD 262,000 debt collection lawsuit against Twiga, which put the agritech at risk of liquidation. The announcement comes after Twiga raised USD 35 million debt funding last November as part of a business refinancing process. In December, a court in Nairobi gave Twiga and Incentro five months to resolve their disagreement. After the new funding, this is another positive development for Twiga, which has been navigating troubled water for the past two years. In 2023, the company reduced its workforce by one third and shut down 11 depots in an effort to reduce operational costs by 40 percent.