Investors update: April 12 2023 - Kenya’s Victory Farms raises $35m for East Africa expansion

Kenya’s Victory Farms raises $35m for East Africa expansion

Highlights

• Victory Farms, a Kenya-based aquaculture startup, has raised $35 million in a Series B round.
• The Series B round was led by Creadev and saw participation from the Acumen Resilient Agriculture Fund (ARAF), DOB Equity, Endeavor Catalyst Fund, and Hesabu Capital.
• The startup says it will use the funding to finance the expansion of its operations in Kenya and Rwanda and potential entry into Ethiopia, Uganda, and Tanzania. 

Source: TechCabal

Our Takeaway

The East African fish supply deficit is one of the greatest supply-demand imbalances in the global food system today. Regional governments estimate a supply gap of 1 million tonnes of fish per annum. The aquaculture industry supplies meet a mere 3% of the deficit. Victory Farms presents a scalable solution to East Africa’s nutritional security challenge and also claims to mitigate East Africa’s climate change problem. The startup estimates that, at its current capacity, it is preventing at least 160 thousand metric tons of carbon dioxide emissions by shifting consumers to fish. 

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French-African Fund closes at over $53m to back SMEs

Highlights

• AfricInvest has reached a final close of the French African Fund II (FFA II), the successor fund to the French African Fund (FFA), having raised over $53 million in subscriptions. 
• Backed by French and international institutional investors, including private investors, as well as family offices, the FFAs are dedicated to French small and medium-sized enterprises (SMEs) that aim to invest and grow in Africa.
• The fund, managed by AfricInvest Europe, part of AfricInvest Group, aims to accelerate the growth of these SMEs through development projects on the continent and beyond.

Source: ABC

Our Takeaway

Africa-based small and medium-sized enterprises continue to face significant challenges in accessing credit, with an unmet financing need of $140 billion to $170 billion. Financial institutions are often constrained by regulatory requirements, limited appetite for a segment that is perceived to be higher risk, a lack of adequate collateral available from SMEs, knowledge gaps by lenders, and skill gaps demonstrated by borrowers. Tailored facilities such as the FFAs help to address this by broadening the capital pool available to SMEs while mitigating risk for traditional financial institutions to boost lending to the sector.

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Farmerline expands to Francophone Africa with Ivorian office

Highlights

• Ghanaian agritech startup Farmerline has expanded into Francophone Africa with a launch in the Ivory Coast, deepening partnerships across West Africa to support small-scale farmers.
• This year marks a decade since Farmerline was launched, delivering daily voice and SMS agronomic messages to 800 farmers in Ghana’s Ashanti region in their own language through its Mergdata platform. 
• It has so far collaborated with over 3,000 partners across 48 countries, including government institutions, local agribusinesses, NGOs, and food companies, which have licensed Mergdata to support and improve the lives of 1.7 million farmers.

Source: Disrupt Africa

Our Takeaway

Sub-Saharan Africa has the potential to increase its agricultural output and overall contribution to the economy, however, the sector remains untapped largely due to a lack of access to quality farm inputs and infrastructures like warehousing and market access. Startups like Farmerline address some of these issues while also contributing to Africa’s rise as a global leader in agritech. Between 2016 and 2019, the industry grew by 44% year-on-year, and the continent has registered the highest number of agritech services in the developing world reaching more than 30 million smallholder farmers as of 2021.