A McKinsey and Co. study suggests that while sub-Saharan Africa has the potential to increase (or even triple) its agricultural production and overall contribution to the economy, the sector remains untapped largely due to lack of access to quality agricultural inputs , to comparable infrastructures such as storage and the market. This is in an economy that derives 23% of its GDP from agriculture, with 60% of its population involved in small-scale farming.
Noting critical gaps in the region’s agribusiness space, Ghanaian agritech farmer line stepped in to provide technologies that are envisioned to increase farmers’ access to high-quality production inputs and education on agricultural best practices, including how to better cope with the effects of climate change. Its solutions are also designed to promote quick access to markets by farmers for better incomes and reduced post-harvest losses and waste.
$12.9 million pre-Series A funding
Farmerline was founded in 2013 by Allysius Attah and Emmanuel Owusu Addai. It is now poised for a rapid take-off with plans to reach 300,000 farmers in 2022, an almost 400% increase in growth from last year. It will begin its expansion in Ghana before expanding to neighboring Côte d’Ivoire, accelerated by new pre-Series A funding of $12.9m ($6.4m in equity and $6.5m). millions of dollars of debt).
The round was led by Acumen Resilient Agriculture Fund (ARAF) and FMO, the Dutch entrepreneurial development bank, with the participation of Greater Impact Foundation. Lenders included DEG, Rabobank, Ceniarth, Rippleworks, Mulago Foundation, Whole Planet Foundation, the Netri Foundation and Kiva.
Attah told TechCrunch that agtech will use its first equity financing to build physical infrastructure such as warehouses and distribution networks.
“We see ourselves as the Amazon of farmers…digital and physical infrastructure powering a marketplace that enables the movement of goods and services to and from rural areas,” Attah said.
“We plan to use the funding to strengthen our infrastructure, ie warehouses and distribution channels. Having a network of partners who can help us quickly move inputs like fertilizers and seeds to rural areas, and agricultural produce from rural areas, is important and part of what we do. We don’t intend to bring all the logistics and storage in-house, but we want to be more efficient and that means working with the right partners,” he said.
Farmerline works with agribusinesses (usually small retail stores that stock agricultural inputs) to ensure farmers have access to high quality supplies. These store owners, usually the first point of knowledge for farmers, are used by Farmerline to distribute educational materials and to bring farmers together for training. Partner shops use startups Merge dataa proprietary AI technology platform for supply chain intelligence, to digitize the farmers they serve, and to generate the data agritech needs to predict demand for agricultural supplies.
“We’re tapping into this network of agribusinesses, and in a way, we’re tapping into a web of trust — the relationship that these store owners have with farmers to help us grow,” Attiah said.
Partnering with retailers, Attiah said, emerged after Farmerline realized that working directly with farmers would be “competing with local businesses, and it just didn’t make sense. The door-to-door cost for each farmer was very high,” he said.
“Working with agribusinesses made our businesses scalable, and it also helped us to have more impact, especially during the pandemic when we couldn’t travel – they became our eyes and ears on the ground. We sent them truckloads of fertilizer and seeds, which they then distributed to farmers, and that model worked very well.
Using Mergdata, Farmerline can report on the performance of its partner agribusinesses (retail stores) and develop a credit scoring program that guides lending for business expansion.
According to Attiah, the startup more than doubled its direct reach last year to reach 79,000 farmers, up from 36,000 in 2020 and 8,000 in 2019.
Additionally, through third-party licensing for Mergdata – which is now used by 180 customers, including governments, non-governmental organizations and agribusinesses to ensure their supply chain transparency and traceability – agtech has digitized more than one million farmers in 26 countries across the globe. Benin, in West Africa, uses the platform as a national market information system.