Kenya’s iProcure, a startup offering agricultural inputs and digital supply chain solutions in rural Africa, has announced the closure of its $10.2 million Series B round.
The investment was in debt and equity which came from a number of international investors led by impact investor Investisseurs & Partenaires (I&P).
Joining the round were Novastar Ventures and British International Investment (BII) (formerly CDC Group) which injected $3 million into the deal. The impact investment group and US-based New General Market Partners and Ceniarth also participated in the round.
iProcure, which has grown 23 times in the past five years, will use the investment to scale and solidify its position in East Africa and support its expansion into Uganda and Tanzania, as well as upscaling its technologies, logistical infrastructure, and distribution network. iProcure will also launch a credit offering for agro-retailers to purchase supplies.
Niraj Varia, iProcure’s new CEO and former partner at Novastar Ventures, said, “In addition to bolstering our existing operations with more warehouses and delivery vehicles, this funding will expand iProcure’s product offering to include credit services and a new POS system for agro-dealers to better forecast their inventory needs and reduce pilferage within their shops. This will help our 5,000+ partner retailers increase their earnings and better serve the hundreds of thousands of farmers that depend on each shop.”
The Big Picture
iProcure has been working in the market for a decade now, trying to optimize the agricultural supply chain in rural Kenya.
As with any other market in developing countries, Kenya is rife with challenges ranging from logistical issues and limited flow of inputs to limited access to quality inputs and, as identified by iProcure, understocked agrodealers.
Streamlining supply chains in rural parts of Kenya
iProcure offers comprehensive services in the agri supply chain ranging from last mile distribution services, procurement, and business intelligence to data-driven stock management.
“Our mission is to reduce farm input scarcity in farming communities. The objective is to ensure that whenever a farmer walks into an agro-dealer, the dealer has the product that the farmer requires at the right time,” Stefano Carcoforo, co-founder and managing director at iProcure tells AFN.
The team found that a long-standing problem in rural Kenya was that agrodealers were understocked. Further, they had challenges with proper stock keeping and effective management of their stores.
This led to the development of iProcure’s mobile-based enterprise resource planning (ERP) software designed to meet the needs of the agrodealers. The users have free access to the ERP and iProcure gets to supply them with the products that they need.
The ERP which has been developed for over seven years, and is still continuously developed, helps agrodealers keep in touch with farmers, tracks which farmers have been extended credit, generates purchase reports, and offers recommendations on which products to stock for upcoming seasons based on data analysis.
Agrodealers that previously had only one store are now able to operate multiple stores as a result of the technology provided by iProcure, the company argues.
Being a data-driven startup as well, iProcure gathers information to help it determine where to position stock in distribution centers, in what quantities, and at what price point, ensuring that the product is consistently affordable and available on a consistent basis.
The distribution centers were created to buffer stock that can then be delivered anywhere in the country within 24 hours.
“You have to gain control of all of the issues in your sphere of control. Obviously, the weather isn’t. But we do have control of ensuring that there is a robust distribution channel downstream so farmers have access to inputs on a convenient and affordable basis, consistently.” says Carcoforo.
Carcoforo came from an engineering background and ventured into agritech after developing supply chain software in Haiti, where he had initially gone to work on infrastructural projects meant to aggregate demands for seeds in remote areas in Haiti.
He attributes iProcure’s robust growth to understanding technology and how to build robust supply chains more than his industry-specific knowledge.
“Building robust supply chains in this part of the world involves designing in a lot of slack and redundancies—something that more advanced economies wouldn’t need to do,” he notes.
To date, iProcure has served around 5,000 agrodealers in Kenya and 1,000 in Uganda. Its supply network has so far served over a million farmers.
By cutting out the multiple levels of middlemen in the traditional agricultural supply chain and providing technology-driven insights on supply levels and price, iProcure has been able to ensure the availability, quality, and delivery of critical agricultural inputs like fertilizers and seeds at up to a 25% discount from prevailing market prices.
What they’re saying
For BII, the investment aligns with its mission to lift farm productivity, integrate value chains, improve access to nutritious food, support sustainable F&A business models, and encourage innovation in the agri sector.
“I think making the right inputs available to farmers at the right time is ultimately what we’re going for here. You end up with farmers, knowing what to use and when to use it, but just not having those inputs available,” Megha Okhai, an investment executive at BII, told AFN.
“iProcure solves the problem of connecting smallholder farmers with the right inputs at the right time. Serving a disaggregated smallholder farmer base is challenging. iProcure tackles this by leveraging existing agro-retailers as rural touch points to reach smallholder farmers in any given area. It has the potential to further capitalise on retailer insights derived through its iPOS system, which opens up additional opportunities,” said Sara Taylor, head of SME Funds at BII, in a statement. She added that BII was excited to partner with iProcure to help build a more inclusive, resilient, and efficient supply chain for agricultural inputs in Africa.
Asif Noorani, senior investment manager of Impact Investing at I&P said in a statement, “iProcure is playing a pivotal role in transforming the agricultural sector in Africa by digitizing the agro-retailer networks and making last-mile agricultural inputs distribution more efficient. At its core, iProcure is improving farmers’ access to genuine and affordable agricultural inputs by consolidating the region’s fragmented agricultural inputs sector. These processes ultimately lower the cost of food production and improve food security.”