Releaf, a Nigeria-based agriculture technology start-up, has reportedly secured an investment of $2.7 million in seed funding. The company is seemingly working on building proprietary software and hardware solutions to help farmers and food manufacturers become more profitable and efficient.
According to reports, the funding round saw the participation of Pan-Africa-focused venture capital firms, Future Africa, Consonance Investment Managers, and Samurai Incubate Africa, along with individual investors, including Justin Kan of Twitch and Stephen Pagliuca, the chairman of Bain Capital.
In addition to the seed funding, Releaf has received $1.5 million in grants from USAID and The Challenge Fund for Youth Employment (CFYE), claim reliable sources.
The agritech startup, founded by Uzoma Ayogu and Ikenna Nzewi, focuses on value chains wherein smaller factories are located near smallholder farmers. This supposedly enables them to improve processing yields while incurring lesser logistics expenses, which leaves the farmer with more money to use.
It is worth noting that the startup initially intended to use software to boost agricultural output in Nigeria. However, the company decided to focus on a specific crop and spotted the opportunity in the oil palm industry, Nzewi claimed.
For the unversed, the Nigerian oil palm market is worth $3 billion, consisting of 4 million smallholder farmers. These farmers are responsible for 80% of the production although they face numerous obstacles in processing the oil palm since the sector is fairly fragmented, as per reports.
Significant processing capacity is crucial to extract vegetable oil from the oil palm crop. Nzewi stated that the team recognized this opportunity and developed Kraken, a proprietary patent-pending machine, to assist farmers in cracking oil palm nuts.
Nzewi further added that Releaf would utilize the seed money to build technologies and distribute them to smallholder farmers. The $1.5 million grant would support the company in providing working capital finance to the farmers, claim reliable sources.
Rena Yoneyama, Samurai Incubate Africa’s managing partner, stated that, Releaf's unique strategy distinguishes it from other agritech businesses with which the venture capital firm has previously worked. Reportedly, Yoneyama also said that the company’s aim to decentralize food processing is a good fit for Africa’s economic development scenario for the coming few decades.