GreenTec is Reading “The Rise and Rise of African Agri-tech” on Disrupt Africa.

on 09 February 2018
Rice fields in Uganda

Frankfurt (Germany), February 2018. This week, we are very happy to share “The Rise and Rise of African Agri-tech” by Tom Jackson and published on the Disrupt Africa website. The article reviews the rapid rise of agri-tech in the African agriculture sector and presents views on its development and perspectives.

Sacks of grains heading to market
Logistics are only one part of the value chain that provides opportunities and challenges for startups

Funding for the African agri-tech sector has dramatically increased in recent years, from a paltry $50,000 US in 2015 compared to the $13.2 Million US reported raised in the Disrupt Africa Tech Startups Funding Report 2017. This is an increase of 206 per cent from 2016, and 8,660 percent from 2015. Much of the 2017 funding was raised by Kenya’s Twiga Foods, which leverages technology to consolidate the fragmented purchasing power of urban retailers. GreenTec’s investee, Farmcrowdy, received a sizable portion of the remaining funding, closing a US $1 Million  round in December. We will point out, that GreenTec made its investments in the sector in Fall 2016 and early 2017.

GreenTec is particularly attracted to the agriculture sector for a number of reasons, principal among them is the simultaneous possibility of scaling both impact and profit within a market projected to grow to US $1 Trillion by 2030. With approximately 65% of the continent's workforce engaged in agriculture, the potential to improve millions of livelihoods is readily apparent. The paradox of African agriculture is that despite having very high potential productivity, the sector suffers from many inefficiencies and logistical problems across the value chain. This paradox provides both the challenge and the opportunity for startups that we strongly recommend they pursue. Similarly, we strongly encourage other investors to explore the early-stage segment, which has traditionally been limited to donors and impact investors. An innovative solution, matched with solid operational fundamentals and well-executed growth strategy can produce very attractive returns as well as large scale positive social impact in just a few years.

AgroCenta agents being trained on using the app
AgroCenta Agents being trained on using the app.

For instance, Farmcrowdy's platform expands financial access for rural farmers, many of whom are un-banked and would not be considered credit worthy. Leveraging technology, the company brings sponsors and farmers together to their mutual benefit. Similarly, AgroCenta's model uses concepts from the Sharing Economy in its suite of services for farmers to help them sell their good on Ghana's national markets. AgroCenta's technological approach mobilizes rural production and leverages efficiencies gained through shared logistics. Finally, Divine Masters Limited, our Ugandan agribusiness, is implementing a custom-developed value chain management solution as well as a number of targeted technological improvements to provide real-time business intelligence and improve efficiency across its operations. In each of these cases, business fundamentals and innovative ideas paired with technology are producing positive impacts and profits.