Kenneth Obiajulu and Wale Omotimirin launched Agricorp, a tech-enabled agronomic services startup, three years ago to help Nigeria’s spice farmers overcome issues common across Africa’s agriculture sector: lack of access to farm services, financing, and market access.
Back then, they couldn’t have predicted what 2020 and 2021 would have in store for their business.
Amid Covid-19, business boomed.
“Europe, Asia, and America don’t have direct contact with African businesses and have to go through various intermediaries to source goods,” Obiajulu tells AFN. When the pandemic disrupted global supply chains, “a lot of businesses reached out to the production or origination points of those goods.”
Agricorp says the disruption and re-organisation of agrifood supply chains gave the company a 330% revenue bump in 2020. By mid-2021, it had surpassed those revenues.
This growth has also attracted investors’ attention. Last month, the Lagos-based startup closed a $17.5 million Series A financing round, led by Vami Nigeria, with participation from One Capital and AFEX.
In Nigeria and many other African countries, local spice growers are unable to meet global demand due to inadequate capacity.
Take ginger, for example – a market that could potentially be worth $4.8 billion by 2027. Nigeria is the world’s second largest producer of ginger, but barely accounts for 3% of global exports, according to data from the UN Food and Agriculture Organization. While Nigerian farmers produce a large supply, they lack access to international markets. Low export numbers are also due to post-harvest losses and wastage.
Obiajulu and Omotimirin launched Agricorp to help farmers boost capacity and tap both local and international export opportunities. The company’s experts educate and train farmers on better agronomic practices. Working with more than 5,000 farmers, the team provides crucial information on things like rainfall patterns, knowledge of which can alone reduce post-harvest losses by 20%, the founders say.
Agricorp also acts as an intermediary to help farmers source and use farm inputs. It partners with the Central Bank of Nigeria and other financial institutions to provide farmers with access to credit.
The combination of these services helps farmers increase their output, translating to higher incomes, Obiajulu says.
The strategic shift that gave Agricorp an edge during the pandemic was its move into the export markets, becoming a direct supplier to international buyers. Agricorp buys produce from growers directly — 80% of its supply is sourced from smallholders — in addition to output from its own farm. Then it processes the spices and packages them for export to India, South Africa, Morocco, the UAE, and the UK.
Agricorp primarily exports ginger, due to its competitive advantage in working with ginger farmers, as well as the high demand for the product. It also exports turmeric, sesame, chilli peppers, dried garlic, and onions.
Agricorp’s Series A round was of significant size for an agtech venture in Africa, where the pool of available venture capital is small compared to other regions.
“We were looking for investors who look at us as growth partners and who understand how agricultural investments work,” Obiajulu says.
The startup will use the funding to expand its production facility so it can process spices into powders, which sell at a premium to fresh or dried whole goods in international markets. It’s also eying geographic expansion into East and South Africa, including Kenya, Rwanda, Tanzania, and Zambia.
Obiajulu and Omotimirin have bigger ambitions in mind: they want to change Africans’ perceptions about working in agriculture.
The continent’s food system could become a $1 trillion opportunity over the next decade, if farmers and agribusinesses are enabled with financing and technology. But the sector also needs to retain and grow talent, the founders argue.
The average age of Nigerian farmers, for example, is about 50, in a country where the average age is just 18. Although 70% of Nigerians are involved in the sector, many young people are leaving rural areas in search of more lucrative urban opportunities.
“We want to be the beacon of hope to the youth,” says Obiajulu, “to let them know that agriculture can be fun, it can involve the youth, it can be mechanized and most importantly, it can be profitable.”