FarmCrowdy raises $1M round to bring Nigerian farmers online and to market
Bringing small scale Nigerian farmers to a broader market has netted the
new startup Farmcrowdy $1 million from investors including Techstars,
Cox Ventures and Social Capital.
Farmcrowdy’s digital platform connects investors to farmers through sponsorship packages to fund higher yields for a share of the returns.
The
app allows the sponsors to “Farm Shop” screened agricultural
opportunities by produce type, funding amount, contract duration, and
expected returns on an investment. The profiles include details on what
the sponsorship funds―farm inputs, technical advice, or logistical
support―to achieve yields. Common crops are cassava, soya beans, and
rice. Investors can also use Farmcrowdy’s platform to track the
performance of their sponsorships.
“What
makes Farmcrowdy different from other platforms is it turns a complex
problem into a digital marketplace,” Farmcrowdy CEO Onyeka Akumah told
TechCrunch. “We’re taking care of funding for farmers, training for
farmers, providing the market for the farmers to sell. We’re taking care
of the logistics to move farm harvests to the market and making sure
farmers earn a decent return at the end of their cycle,” he said.
Farmcrowdy screens small scale farms throughout Nigeria and works with partners such as Syngenta and Africa’s International Institute of Tropical Agriculture
to shape sponsorship packages to provide them expertise. A big problem,
according to Akumah, is many of the farms do not have the inputs to
reach the full harvest potential of their land plots.
Farmcrowdy’s
revenue model operates on a split system for sponshorships: principal
plus 40 percent for sponsors, 40 percent for farmers, and 20 percent for
Farmcrowdy. For example, if an investor sponsored a maize farm for 6
months at $1000 and at harvest the produce sold for $1500, the sponsor
would regain their investment ($1000) plus 40 percent of profits ($600),
the farmer $600 (40 percent), and Farmcrowdy $300 (20 percent).
Farmcrowdy
will use its fresh funding to scale operations, expand into 20 Nigerian
states, and bring more small-scale farmers and sponsors into its
program.
The startup participated in the accelerator class
of one its investors, Techstars, in summer 2017.
Techstars vetted
Farmcrowdy’s model during a trip to Nigeria earlier in early 2017,
Techstars mentor Cody Simms confirmed in an email.
Agriculture
is yet another African sector in which tech companies are attempting to
scale startups, apps, and solutions. MasterCard launched its 2KUZE agtech platform for smallplot farmers in Kenya, Uganda, and Tanzania in January. AgroCenta has developed digital logistics solutions for smallholder farmers in Ghana.
Farmcrowdy
CEO Onyeka Akumah sees the revenue potential for agriculture in Nigeria
“as massive”, noting the country’s size and growth. “Nigeria has 186
million people and is projected to become the world’s third largest country in the next 30 years. All of these people are going to need food to eat,” he said.
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