Raising $790k in pre-series A: AgroCenta's journey
A parallel challenge to Africa's food security is ensuring the sustainability of subsistence farming, whose production capacity and livelihoods is hindered by an array of issues, ranging from market access to lack of capital and infrastructure.
In 2016, Francis Obirikorang and Michael K. Ocansey came together to improve the agriculture value chain in Ghana. Their company, AgroCenta, introduced an online sales platform ("CropChain ") that connects smallholder farmers directly to an online market, which has wider geographic size, to sell their commodities. This results in reduced exploitative buying to the barest minimum since farmers are in control of selling their commodities at prices that are favourable to them.
Great, so a farmer gets favourable offers for their stock from interested buyers, the next hurdle is getting the stock to the buyer. This logistical problem is addressed using AgroCenta’s proprietary TrucKR solution that allows the smallholder farmer in any remote village in Ghana access to trucks at the click of a button. Further to market access, another challenge AgroCenta addresses is financial inclusion for smallholder farmers. Their "LendIt " solution allows institutions to on-lend and disburse funds to a large network of smallholder farmers - supplemented by mobile payments ("AgroPay ") and crop insurance. This startup looks to ease farmers' journey, from seed to market.
AgroCenta's value proposition and business model has been backed by a total funding of US$2.2 million from various investors and institutions. Their most recent raise has been a US$790k pre-series A round, that included include Shell Foundation, FCDO, AV Ventures and Rabo Foundation. The startup says it plans to use the recent funding to scale its agri-tech ecosystem and purchase crops from farmers. It also plans to develop its smallholder farmer inclusion programmes.
The Ghanaian startup came first in the Seedstars World competition in 2018, receiving US$500k in equity funding. By December of the same year, the company closed a seed round of equity and non-equity funding to scale its operations. They have also received accolades at AfricArena 2018; the Environment and Green Energy category at the World Summit Awards; the Young Entrepreneurs Competition at the World Export Development Forum, and the Africa Social Good category at Tech Crunch Startup Battlefield Africa.
Their US$790k raise comes at the backdrop of astronomical deals being done in the agritech space in Africa, including: US$85 million by GRO Intelligence, Aerobotic's US$17 million raise, and Pula's US$6 million raise.
In response to their recent raise, the co-founders asserted:
“The demand for agricultural raw materials from off-takers in the brewery, manufacturing and consumer sector is increasing exponentially because of the easing of the COVID-19 restrictions that were put in place by the government of Ghana, hence this capital injection will help to secure purchases at fair and transparent prices from smallholders — a much-needed lifeline for many who are at the proverbial bottom of the pyramid.”