AgDevCo Raises $32M to Support Early-Stage Agro Ventures in Africa
TLDR
- AgDevCo secures $32 million funding to establish AgDevCo Ventures for early-stage agribusinesses in Africa, supporting SMEs with investment sizes from $1 million to $3 million.
- AgDevCo Ventures focuses on the "missing middle" segment in East Africa, starting with Kenya, Uganda, Tanzania, and Rwanda, with plans for continent-wide expansion.
- Prioritizes African and female-owned businesses for inclusivity, raising an additional $25 million to commence operations by early 2025.
AgDevCo, a specialist investor in African agriculture, has secured $32 million in funding from the UK's Foreign, Commonwealth, and Development Office (FCDO) to set up AgDevCo Ventures, a new initiative that will back early-stage agribusinesses in Africa.
The venture will provide much-needed capital to small and medium enterprises (SMEs) with investment sizes ranging from $1 million to $3 million, focusing on the "missing middle" segment often overlooked by private investors.
AgDevCo Ventures will initially concentrate on East Africa, including Kenya, Uganda, Tanzania, and Rwanda, with plans to expand across the continent and prioritize African and female-owned businesses to promote inclusivity. It is also raising an additional $25 million from development finance institutions and family offices to kickstart operations by early 2025.
Key Takeaways
AgDevCo Ventures marks the firm's return to the early-stage agribusiness space after shifting its focus to larger investments in recent years. The new initiative aims to fill the gap in funding for SMEs, particularly in Africa's agriculture sector. These businesses face barriers such as high transaction costs and perceived risks, which deter traditional investors. With support from the FCDO, AgDevCo has committed $210 million to 38 investments across sub-Saharan Africa as of June 2024. The company's portfolio includes significant investments in Kenyan agribusiness Agris, Pan-African Hatch Africa, and Côte d'Ivoire's Cashew Coast. By addressing the "missing middle" and focusing on climate resilience, it is poised to play a vital role in the future of sustainable agribusiness on the continent.
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