Global Courant 2023-04-28 16:25:22
Today, there is a well-known story that you see outside Africa, in which food issues on our continent are often framed mainly in terms of challenges. But the reality for many young Africans like us is very different. For us, food is the source of exciting business opportunities, especially for the growing number of small and medium-sized businesses that populate Africa’s thriving innovation economy.
We are both part of the region’s fast-growing and refreshingly youthful middle class, a middle class generating a thriving consumer food market that will soon pay off more than 1 trillion dollars. We are also part of a large group of young Africans launching a wide range of innovative and successful digital startups. Many, like ours, find success in the food and agriculture sector.
Mobile apps developed by Ayodeji’s ThriveAgric facilitate access to inputs, technical advice and buyers for 500,000 smallholder farmers in Nigeria. Peninah’s DigiCow app connects 80,000 smallholder dairy farmers in Kenya with livestock veterinarians, artificial insemination providers and feed supply services – and has an additional 150,000 users across other agricultural value chains.
Our common challenge now is generating investment capital in a competitive landscape to help us expand into new markets. Last year, Africa was actually the only region in the world where investments in tech start-ups increased. Overall, however, there is still less venture capital (VC) flowing to Africa than to other parts of the world. And technology finance forecasts, worldwide and for Africawere already gloomy for 2023, even before the recent banking turmoil made the prospects that’s much worse.
Our aim is to help investors continue to see the promise of African tech startups, especially those focused on agricultural technologies or ‘agritech’. That includes increasing interest in agritech investments development finance initiativessuch as that of the World Bank recently launched early stage VC fund and a similar effort of British international investment.
ThriveAgric co-founders Uka Eje (left) and Ayodeji Arikawe connect 500,000 African smallholder farmers to pre-harvest financing, education and premium markets through their app.
We believe our companies and many others in African agritech have the kind of growth potential that should be a magnet for the world’s venture capitalists. The reason is relatively simple: we use digital tools to address longstanding barriers to boosting production and income on small farms in Africa at a price that is affordable for farmers and profitable for our businesses.
We met after we were both selected as winners of the 2022 AyuTe Africa Challenge. The competition was launched by Heifers International to accelerate digital agricultural entrepreneurship in Africa with an infusion of “patient capital” – financing that helps companies build a foundation for long-term growth that will attract other investors.
We have taken different paths to our agritech ventures. Peninah previously worked in agricultural extension and has an MBA in finance. She started DigiCow because she saw opportunities to use digital technologies to solve problems she faced as the daughter of struggling smallholder farmers. Ayodeji studied computer engineering at university. Although he had no previous connection to agriculture, a friend who had started a soybean processing plant in Lagos, Nigeria, encouraged him to apply his engineering skills to support soybean, maize and poultry supply chains.
We are connected by a passion for using technology to build profitable businesses that create new opportunities for smallholder farmers and strengthen food systems across the continent. We have come across many other young African entrepreneurs who are on a similar journey.
They include Nnaemeka Ikegwuonu, founder of ColdHubs, which has deployed a network of compact, remotely controlled solar-powered coolers to support farmers in rural Nigeria. There’s Jehiel Oliver, founder of HelloTractor, known as the “Uber for Tractors” for providing a digital solution to Africa’s tractor shortage. And there’s also Naledi Magowe and Martin Stimela, co-founders of Brastorne Enterpriseswhose apps have delivered affordable web-based farming services to 1.8 million smallholder farmers in poorly connected rural areas.
The investment case for African agritech is easily revealed by applying the same basic due diligence you would to any potential business venture: look at the problem we are solving, research the addressable market and analyze the potential return. There are many emerging agrotech companies across the continent that tick all the right boxes.
We are also aware of the growing interest in socially responsible or impact investing. African agritech is about using investment capital to support homegrown solutions to African food challenges – solutions that create jobs for youth, enable food self-sufficiency and help increase access to sustainable, healthy nutrition for all. We see it as a clear opportunity to do good by doing good.
Article by Peninah Wanja and Ayodeji Arikawe. Peninah Wanja is the co-founder and CEO of DigiCow, and Ayodeji Arikawe is the co-founder and CTO of ThriveAgric.
