Technology

Kenya-based firms raise Sh7.3bn from global investors


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Three Kenyan-based start-ups have raised Sh7.3 billion ($63.5 million) from multiple international investors to expand in East and West Africa. FILE PHOTO | NMG

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Summary

  • The firms include agri-tech company Apollo Agriculture, fintech company 4G Capital and Powered by People, a wholesale e-commerce platform.
  • Apollo Agriculture offers a mobile-based product loan package for farmers that includes working capital, data analysis for higher crop yields and options to purchase key inputs and equipment.

Three Kenyan-based start-ups have raised Sh7.3 billion ($63.5 million) from multiple international investors to expand in East and West Africa as well as offer services.

The firms include agri-tech company Apollo Agriculture, fintech company 4G Capital and Powered by People, a wholesale e-commerce platform.

Apollo Agriculture, which offers a mobile-based product loan package for farmers that includes working capital, data analysis for higher crop yields and options to purchase key inputs and equipment, has announced a Sh4.6 billion ($40 million) in Series B funding round that was led by Softbank Vision Fund 2.

The start-up began operating in 2017 to deliver bundled packages of financing (tied to crop cycles), agricultural inputs (seeds and fertiliser), crop insurance and digitally delivered information services directly to smallholder farmers in Kenya.

It uses the satellite imagery data of farms and artificial intelligence (AI) to rate the creditworthiness of farmers.

The firm said that it will use the new capital to double the number of farmers it serves by the end of 2022, refine the technology and deliver more products and services to farmers.

“We are continuing to invest in growing fast, serving more farmers, helping them grow their acreage and really hitting the acceleration on the business. And so that’ll be both continued expansion across Kenya but also expansion into new markets,” Apollo Agriculture co-founder and chief executive officer (CEO) Eli Pollak told TechCrunch, an American online news platform for startups.

Part of the fund will also be used for expansion to East and West African countries.

“We are also continuing to develop products that deliver more value per acre. That could be new crops that enable customers to earn more money,” said Pollak, who co-founded Apollo with Benjamin Njenga and Earl St Sauver.

Apollo started off by working with maize farmers but helping them diversify to other high-yielding crops has been its area of focus.

Similarly, 4G Capital, which provides unsecured credit to micro-enterprises, has raised Sh2.1 billion ($18.5 million) in Series C funding from global private equity firm Lightrock.

The firm said that it will increase the new credit limit to customers from Sh114,560 ($1,000), allow longer repayment periods from the current maximum of one month as well as expand its clientele base and grow its profits.

“We will be building new loan products this year, with longer durations and larger amounts and lend to bigger businesses in the agri-value chain…We are also planning to launch an app that will allow our clients to run their businesses better, have access to our goods and services, and connect them with other providers like FMCG (fast-moving consumer goods) distributors.

“The future of 4G, is a really enriched value proposition for our clients driven by data and AI,” 4G Capital CEO and founder Wayne Hennessy-Barrett told TechCrunch.

Powered by People, with hubs in the Americas, Asia and Europe, has also secured Sh572.8 million ($5 million) in seed funding to increase its transaction volume by growing the number of small brands using its business-to-business (B2B) online marketplace to reach international buyers.

The equity funding was led by Susa Ventures and Golden Ventures, with participation from a number of investors, including Flexport Ventures, J Ventures and the founders of DraftKings, Fabric.

Powered by People links small brands to retailers keen on supply-chain transparency, sustainability and small-batch production — companies that are also pushed by the need for diversity and have pledged to support small traders as they also keep up with the rise of conscious customers.

“We are going to continue building up our technology…we have new vendor tools we are launching this quarter that will help streamline and automate things to help these businesses take on bigger orders and grow. We are also investing in building our senior leadership,” Powered by People co-founder and CEO Ella Peinovich said to TechCrunch.