- Kenya is the top destination for agritech investments in Africa, according to Fitch Solutions.
One of the major factors responsible for this is the need to solve the country’s food security challenges.
Between 2019 and Q1 2022, two of Kenya’s leading agritech startups —Twiga Foods and Apollo Agriculture — have raised $80 million and $40 million, respectively.
A new report by Fitch Solutions said Kenya has emerged Africa’s hot spot for agritech investments.
There are two factors responsible for this. The first factor has to do with the important role agriculture plays in the East African country’s economy. Also, the endless desire to proffer solution to Kenya’s food security challenges has helped to attract investments to the country’s agritech sub sector.
As you may well know, agriculture technology (agritech) has to do with the adoption of technology/digitisation in agriculture and all its value chains. This is done with the aim of improving yield and profitability.
Africa has quite a number of agritech startups, many of whom are concentrated in Nigeria, South Africa, Egypt and of course, Kenya. Some of Kenya’s most notable agritech startups are Apollo Agriculture, iProcure and Twiga Foods.
Last month, Apollo Agriculture raised $40 million in a Series B funding round that was led by Softbank Vision Fund 2, with participation from Yara Growth Ventures, Endeavor Catalyst, the Chan Zuckerberg Initiative, etc. The company said it will use the money to expand and develop new products that will continue to help small-scale farmers to maximise their profits.
Meanwhile, earlier in November 2021, Twiga Foods announced that it had secured a $50 million Series C funding. Business Insider Africa reported that the funding round was led by Creadev, with participation from TLcom, IFC Ventures, DOB Equity, and Goldman Sachs’ spinoff Juven among others.
Note that Twiga Foods’ Series C round in November 2021 followed a $30 million Series B round in 2019.
It’s important to point out that the unique features of these agritech startups are partly responsible for attracting these investors. For instance, Apollo Agriculture targets smallholder farmers, offering lending products, insurance and farming inputs. Similarly, Twiga Foods specialises in connecting smallholder farmers with retailers, thus helping to facilitating the value chain.
There are a number of other Kenyan agritech startups that are driving change and making impact. Some of these are DigiFarm which was launched in 2017 and currently has more than 1.4 million users. There is also MobiGrow which was launched in 2018 by the Central Bank of Kenya to specifically serve smallholder farmers.
By EMMANUEL ABARA BENSON (BUSINESS INSIDER AFRICA)