FundingTechnologyWeekend Features

GFA Weekend Feature – Funding & Agritech in Africa…with a snapshot of 2019

An Ivorian farmer sprays his oil palm plantation with a drone.
Image: REUTERS/Luc Gnago –


GFA’s April theme will focus on the Agricultural space, with an emphasis on Agritech – one of the critical factors for feeding Africa’s booming population, a land of promise for start-ups & ventures, and a goldmine for strategic investors.

A view of the existing potential in Africa’s Agritech space, from experts reads: the next Jumia from the continent could and should, come from Agrictech Africa. Jumia, the e-commerce startup that has been catering to African consumers through the online sale of products since 2012, officially launched its Initial Public Offering (IPO). The “Jumia Phenomenon”, it being the first African tech start-up listed on the NYSE.

This has now firmly cast the spotlight on the continent’s start-up scene. A range of stakeholders including governments, investors and prospective entrepreneurs are keen to learn and participate in the cascading effect.

So why does Agriculture in Africa, still seem like the distance between the moon and sun in terms of achieving potential and the present scenario? This reality depending on how you perceive the situation, because it provides venture opportunities and funnels for funding, which also goes beyond the landscape for startups.

Unexploited Opportunity

Africa’s potential to become the food basket of world is, and “maybe” a clear and open “Nchi ya ahadi”, to unlock investments and drive a new wave of innovations propelled by entrepreneurs.

With 60% of the world’s unused arable land and 54% of Africa’s population working in the sector, (African Development Bank-AfDB), the continent has enormous agricultural promise. The AfDB acknowledges the importance of agriculture to the continent’s transformation by explicitly making it one of its High 5 priorities, under the headline “Feed Africa”.

Although the continent has experienced consistent growth over the past decade, AfDB data indicates that over 120 million Africans remain out of work and close to 50% of the population still live below the USA $1.25 poverty line, with around one in four people in Sub-Sharan Africa remaining undernourished.

While it is recognized that Africa is the least contributor to carbon emissions globally, the continent is also the most vulnerable to climate variability and change. Priority areas for transitioning the continent to green growth include mainstreaming sustainable development initiatives through investments in clean renewable energy, climate smart agriculture and sustainable water resource management. These are also crucial for the growth of agriculture.

A crucial frontier and platform for this growth, that still rests at a stage of infancy in terms of utilisation on the continent – is Agritech.

From a funding and investor point of view, statistics later in this article indicate that in 2019, investment in this space represented just 5.6% from a total pool attributed to African startups that raised $1million and above in funding.

Despite the acknowledgment of resources and what is possible, Africa remains the most food-insecure region in the world and a net importer of food. This calls for a fresh approach and Agritech may just be the answer.

What is Agritech?

Agritech or agriculture technology is the term referring to the use of technological innovations in agriculture to increase its yield, efficiency, and profitability.

This includes using technology to achieve faster planting, modified crops that grow well in different environments, and harvesting. It can also be the use of robots, big data, AI or any methods necessary in order to solve the challenges that the agricultural industry faces.

Agritech helps bring in advancements and innovations to the robotics and automated machinery field which helps in increasing the efficiency of agricultural production. This is because automated machinery can help in numerous ways to improve yield, resilience to climate change, pest control and security to name a few. Agritech startups are changing and improving the farming sector around the world.

By using digital agriculture tools, farmers in Sub-Saharan Africa for instance, build stronger ties with formal value chains, gaining access to global markets and becoming climate-resilient. Farmer and farm data generated by digital agricultural tools, in particular, supports the creation of economic identities for farmers, enabling them to access much needed financial services such as credit and savings products.

Recent Evolution To Present Day

Though often considered to be rather traditional, agriculture finds itself on course to evolve into a high-tech industry as advancements in machinery and a growing number of startups show. New concepts like smart & precision farming, crop efficiency, and vertical farming bring a breath of fresh air to this field, leading to what is called Agritech or, in some cases, AgTech.

Across Africa, we see unprecedented levels growth compared with the previous 5years – as farm labourers look for solutions to help them continue to work in the face of unpredictable weather, an exploding population and an uncertain economic landscape.

Highlights of 2019

a) Some Numbers

According to a report released last year by Disrupt-Africa, since 2016, over US$19 million ( as of 2018) had been invested in the agritech sector, with the number of startups operating in the market increasing by 110 percent during the same period.

In Africa, vanguard startups utilise mobile applications to enhance agricultural digitization and take a significant step in achieving digital inclusion, profitability and resilience to climate change. Digest Africa data record 131 agritech startups that have raised $62M (as of Novermber 2019) in a mixture of disclosed deals over time, although a vast majority of these have raised in grants and debt finance. 

Digest Africa also highlighted 10 agriculture ventures that scored a total of $29M in venture funding across 17 rounds as the most funded in Africa. Majority raised in Seed rounds ($12.08M raised in 12 of the 17 rounds). However, the highest amount lay among the Series A rounds ($16.7M raised in 4 rounds.) WeFarm and Thrive Agric both have both raised in the most number of rounds (3 rounds each).

We can see from the data above, the almost insignificant ratio of investment into Agritech compared to other sectors, despite as earlier mentioned, the unprecedented levels of growth. Further evidence of how far the band of opportunity could get widened, if exploited through business people & entrepreneurs, taking up or furthering Agritech ventures and raising funding.

b) Star Funding Round

A significant 2019 funding round occurred with Twiga Foods ($30million), covered by GFA  in a previous March 2020 article (link here), and the involvement of Goldman Sachs. Goldman Sachs reckons food distribution will become big business in Africa, given projections indicate the population could double over the next three decades, creating the need for affordable food sources and guaranteed markets for farmers. “We are delighted to be backing Peter (CEO Twiga Foods) and the highly capable team as they scale operations and drive sustainable access to higher quality and lower-priced food on the continent,” said Jules Frebault, the Africa head at Goldman Sachs in a statement. Goldman Sachs co-invested in Twiga Foods.

c) China Is Interested

At the 7th Forum on China-Africa Co-operation (FOCAC) held in Beijing September 2018, Chinese President Xi Jinping pledged €52 billion in financing for projects across Africa over the following 3 years from 2019.

While Jinping did not detail the projects, he said agricultural modernisation would be a key focus, with the investment including funding for 50 agricultural assistance programmes and to send 500 agricultural experts to Africa to train entrepreneurs and agricultural scientists. Chinese firms would also be encouraged to invest at least another €9 billion in Africa over the period.

d) Standard Bank’s Innovative Play

In 2019, another interesting development in this space came from Standard Bank of Africa. As the uptake of Agritech solutions continues to increase, Standard Bank Group committed to preparing its farming clients for a digital future.

The bank had decided to invest in innovative solutions that will deliver enhanced data through remote sensing and digital agronomy. This allows farmers and their agronomists, whose role targets increasing soil and crop productivity, to make better decisions in everyday farming life. Standard Bank’s satellite-based remote sensing innovation is delivered in partnership with UK-based RHIZA and backed by Origin Enterprises Plc and the European Space Agency.

The bank joined forces with RHIZA to take advantage of the extensive research and development that the farming solutions company has conducted over the years. RHIZA provides agricultural satellite imaging and analysis, among other solutions, and offers the highest-resolution image frequency available.

e) Kenya Leads The Way

As of 2019, Kenya ranked as the leading country in Africa in the use of technology to boost agriculture by a European Union-funded CTA firm.

If the use of digital farming technologies is well implemented, Kenyan farmers can increase their annual profits by between 7.1 percent and 76.3 percent, as had been predicted by UK innovation foundation Nesta.

What Attracts Funders To This Space

“The Food and Agriculture Organisation (FAO) predicts the size of the agriculture market in Sub-Saharan Africa will grow from US$200 billion in 2015 to US$1 trillion by 2030. This expected five-fold market growth presents very attractive investment return opportunities, especially for investors willing to take on risk earlier in the development process,”  in a quote attributable to Erick Yong’s of GreenTec Capital Partners – an investor in Farmcrowdy, an agric-tech platform that gives Nigerians the opportunity to participate in Agriculture by selecting the kind of farms they want to sponsor. Africa may in recent years have seen a growth in the number of agritech services that offer things such as farmer advisory services or access to finance via smart phone.

But more than 90% of the market for digital services that support African smallholders remains untapped and could be worth over $2.2-billion according to a new report.

The report by the Technical Centre for Agricultural and Rural Co-operation (CTA) and Dalberg Advisors, found nearly 400 different digital agriculture solutions with 33 million registered farmers across sub-Saharan Africa.

In its report, the CTA firm said that increased use of agriculture technology in Kenya has been boosted by the deep penetration of mobile phones in rural areas which has triggered the relative digital savvy population to use digital solutions to tackle farming challenges.

“While Digitalisation for Agriculture (D4Ag) solutions are present in at least 43 out of 49 Sub-Sahara African countries, over half of the solutions are headquartered in East Africa and nearly two-thirds of registered farmers across all solutions are based in EAC region, with Kenya leading the way,” the report stated.

The CTA said in a statement that its Digitalisation of African Agriculture Report 2018-2019 found that in 2018, the market for the digitalisation of agricultural services netted an estimated $143-million — out of a total addressable market of $2.6-billion.

The report found an annual growth of more than 40% for both the number of registered farmers and the number of digital solutions, suggesting the agritech market in Africa is likely to reach the majority of the region’s farmers by 2030.

The report’s findings are drawn from a number of sources. These include a survey of 175 agritech enterprises, a database that tracks 390 active agritech solutions in Sub-Saharan Africa (and more than 70 such defunct solutions), interviews with more than 120 agri experts and field visits and studies in Ethiopia, Nigeria, Senegal, Ghana and Rwanda.

CTA director Michael Hailu said digitalisation can be a game-changer in modernising and transforming Africa’s agriculture, attracting young people to farming and allowing farmers to optimise production while also making them more resilient to climate change.

“This report indicates that despite challenges, the economics are rapidly improving, with a handful of players beginning to develop viable, large-scale businesses.

“To reach its full potential, companies will now need to focus on converting customer reach to actual use in order for this type of model to yield returns,” he said.

GFA sees the lack or dearth of strategic data as a hinderance for funders to  assess potential risk and viability before investing in Agritechs. Technology is rapidly become the most important tool to overcome this gap.

We also point out how Agritech has made the small-scale farmer a more crucial player in the supply chain. Through platforms and ecosystem business models such as that deployed by Twiga Foods, a farmer’s produce located in a village, is much closer to appearing as food on the table of an urban household, as time factor in supply chains continue to shrink.

“I think, if you look at our vision, you could say that small-scale agriculture is the biggest industry of Earth. It’s a half billion people; it’s the entire world’s supply chain; it’s the origin or commodities markets, and nobody’s really built a platform on that,” Kenny Ewan, founder, and CEO of Wefarm, told AgFunderNews.

Wefarm is a mobile phone-based farmer network and collective for smallholders farmers in Africa.

 “We launched in 2015 in Kenya and added Uganda in 2016. We now have over a million approaching 1.4 million farmers using Wefarm,” says Ewan.

GFA believes Innovation represents a major attraction for investors to the African Agritech space, as it presents to funders & investors, a blueprint identifiable with other industries, which experienced wholesale transformation, through technology, just as earlier mentioned with Jumia. This encourages funders to provide startups & ventures with a financial substructure, to increase their operations, pull in human talent from non-agric sectors and scale rapidly.


GFA will say that agriculture globally remains, one of the last major sectors to truly embrace digitalisation and technology as back-bones for the present and future.

Agritech’s accelerating growth, shows no sign of easing up in the short and medium term time periods – the production of food represents a relentless point of concern because of the enlarging continental population.

The rate of Agritech startups is only expected to increase, while the established players focus on improving the existing methods and technologies. Globally, investments in Agritech grew more than 40 percent, to $17 billion, in 2018 alone – nearly half of the fundraising took place in the US, followed by China and India respectively. Potential for the future of Agriculture and Agritech will remain huge in the years to come.

“Digitalisation for agriculture has the potential not just to support agricultural transformation in Africa but to do so sustainably and inclusively for Africa’s 250 million smallholder farmers and pastoralists,” says Michael Tsan, a partner at Dalberg Advisors.

Referenced Articles:

See links for feature weekend articles here:

1) COVID-19…. Funding for African Businesses & The Opportunities

2) African Fintech Funding; 2020 & Beyond

GetFundedAfrica curates funding news across Africa and emerging markets. Subscribe for GetFundedAfrica Newsletters:

Contact mary@getfundedafrica for questions on fund-raising for your business.

Nichole Manhire

Is the media and brand manager at GFA News. She works very closely with editors and podcasters that contribute to telling the African business success story. For marketing and advertising send Nichole an email:

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