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The Shamba Pride team. Image credit: Shamba Pride

Fresh funding in hand, Shamba Pride aims to digitize last-mile distribution for Kenya’s ag inputs

February 13, 2024

For years, Samuel Munguti was bothered by the broken system that is last-mile distribution of farm inputs in Kenya.

In 2016, he launched Shamba Pride with the sole mission of fixing these inefficiencies by targeting agro-dealers — small, frequently independent merchants that are the main link between farmers and manufactures and wholesalers. The Shamba Pride platform digitizes many tasks for agro-dealers in an effort to improve quality and traceability as well as access to information.

In addition to aggressive expansion across Kenya, Shamba Pride also recently raised a $3.7 million pre-Series A round from EU agriculture financing initiative EDFI AgriFI and Seedstars Africa Ventures (SAV). The round follows a $1.1 million capital raised in 2021 from SAV and Gray Matters Capital.

With the new capital, Shamba Pride hopes to further its business of putting digital tools into agro-dealers hands to enable greater control of their businesses and better support for farmers.

Solving inefficiencies at the local level

Agro-dealers control much of agricultural distribution for rural smallholder farmers, including access to inputs, training and other services. There are tens of thousands of agro-dealers in Kenya, most of which operate as informal businesses. A typical agrovet (an agro-dealer’s end-to-end supply stores) serves between 30 to 500 farmers. These smallholders are entirely at the mercy of inputs available via their agro-dealer.

But in Kenya and most of sub-Saharan Africa, inefficiencies in last-mile input distribution very often lead to price exploitation and counterfeit products for smallholder farmers.

The majority of agro-dealers lack clear information about pricing structures and product sources, and therefore lack the ability to detect counterfeit inputs like seeds, pesticides, animal feeds and fertilizers.

Just recently, the Kenyan government cracked down on agrovets selling uncertified seeds, while the Pest Control Products Board (PCPB) is intensifying surveillance on counterfeit pesticides that are estimated to account for as much as 15% of the market.

A trained agriculturalist, Munguti spent a decade working for fast-moving consumer goods (FMCG) conglomerates like Coca-Cola, Colgate Palmolive and L’Oréal, managing their last-mile supply chains and distribution. 

“Comparing the super great supply chains in the FMCG companies inspired me to do something,” Munguti tells AgFunderNews. “We felt that streamlining the agrovet ecosystem would have ripple effects on food security and rural economic empowerment.”

Formalizing the agro-business

The Shamba Pride platform helps agro-dealers formalize their businesses in terms of record keeping, inventory management, stock sourcing, and financial management, among other tasks. To ensure a holistic transformation, Shamba Pride is also aggressively engaging training in areas like business management and marketing, which helps in terms of improving visibility.

The most critical aspect of the digital platform is connecting the local input retailers to manufacturers and wholesalers, something that guarantees quality inputs at competitive rates; the benefits of this connection are then passed down to farmers. Through a simple interface, farmers can order for inputs, request for extension service, market linkages and access buy-now-pay-later financial services.

“We are helping agrovets and farmers generate more revenues, this is important in driving sustainable agriculture,” says Munguti.

Shamba Pride has also created a classification for agrovets based on their usage of the digital platform. The more of Shamba Pride’s tech offerings a store uses, the more it advances along the firm’s structured trade program. Very advanced shops receive four or five stars and are categorized as “digishops,” and offer the widest variety of products and services.

All digishops source their supplies exclusively through Shamba Pride. And because the company has adequate data about this tier, it can also able to facilitate credit access via partnerships with banks and microfinance institutions.

Currently, Shamba Pride has 2,700 stores, 15% of them at digishop level, 40% at three star and another 20% at two stars. All of these stores are spread across 24 counties representing just over half of Kenya and serving over 100,000 active farmers.

Munguti says the new capital will go towards further developing the digitshops network, which are key revenue generators for Shamba Pride. The company estimates that farmers buying in a digishop save on average 20% compared to other agro-dealers and are guaranteed quality inputs. More importantly, farmers report about 350% increase in terms of farm productivity.

This year, Shamba Pride has also rolled out an aggressive expansion to both scale across Kenya and convert more agro-dealers to digishop status. The company also has ambitions to venture into neighboring countries Tanzania, Uganda and Zambia.  

Though Shamba Pride faces competition from other firms like Apollo Agriculture, the startup is determined to scale; it aims to serve 10,000 agrovets over the next 18 months, 20% being at digishop status. Having achieved 200% growth last year, the firm believes this dream is realistic, particularly after securing funding.

 

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