10 AgTech Startups for Agriculture in Africa
Brunch has become one of those pretentious, First World affectations that make us want to move to a deserted atoll in the Marshall Islands and eat coconut crabs all day. The most offensive part of this trendy ritual is the even trendier avocado toast. It’s an avocado spread on bread that has been toasted. That’s it. But we learned that Americans spend about $900,000 per month on this culinary masterpiece. Meanwhile, people living in that faraway place called Africa would be happy just to have the toast. About 27% of the population in Africa – a continent with 54 countries – is considered “severely food insecure,” according to the World Hunger Education Service, with about 20% of the continent’s 1.2 billion undernourished. Yet Africa has 60% of the world’s non-cultivated arable lands, which begs the question: Why aren’t its farmers growing more avocados?
One problem is that over a third of Africa’s countries are run by dictators, and corruption doesn’t care about making sure everyone gets properly fed. Another problem is that most of Africa’s agriculture is subsistence farming, which isn’t very efficient. For example, four African countries – Sudan, Kenya, Tanzania, and Ethiopia – are among the 15 nations with the largest cow populations in the world, but only account for 4% of total milk production. That has forced the continent to import a reported $25 billion in food per year, or about the equivalent of what Brooklyn hipsters spend annually on brunch. There is hope, however, thanks to a growing number of African AgTech startups that are trying to help the continent tip the scales in favor of feeding its own population, if not exporting extra products for profit. AgFunder News put together this nifty market map of 99 startups that are changing the face of agriculture in Africa:
Below we look at 10 of these African AgTech startups that are improving the agricultural landscape with innovative technologies.
Growing Farmers’ Knowledge
Perhaps not so African as globally oriented, London startup Wefarm, founded in 2015, picked up $6.6 million to develop an AI-powered learning and knowledge-sharing platform that is used by more than 660,000 small-scale farmers across the world, including East Africa countries Tanzania, Kenya, and Uganda. The crowdsourcing algorithm matches questions and answers about various problems faced by farmers, such as how to stop erosion problems on a coffee farm. The company claims its platform can locate the best match from a range of suitable responders and get back with a response in under six minutes. The concept is similar to one used by one of the biggest AgTech startups on the planet, Farmers Business Network.
The service is free of charge. What’s in it for Wefarm, you ask? Except for the farmer’s gratitude, their business model includes special seed and fertilizer offerings for platform members.
Update 10/29/19: WeFarm has raised $13 million in Series A funding to continue adding more users — farmers — and more services geared to their needs. This brings the company’s total funding to $20.9 million to date.
Another African AgTech startup that feeds farmers with interactive SMS advice, best practices, and detailed agricultural action plans is UjuziKilimo, which was founded in Nairobi in 2015, with an undisclosed amount of funding. In case you were curious, in Swahili, Ujuzi (pronounced: oo-joo-zee) means knowledge or experience. The database provides weather updates and precision farming tips based on the information gathered from sensors that farmers insert into the ground to read the soil quality and pH values. The machine learning and data analytics platform is even faster than Wefarm, delivering answers in less than two minutes. The startup has been dubbed “Uber for farmers” by Forbes Africa.
Geospatial Intelligence for Farmers
Founded in Cape Town, South Africa, in 2014, with $2.7 million total funding, Aerobotics enables precise pest and disease detection for orchards and vineyards using drones and satellite imagery to monitor tree crops. It is capable of zooming in on individual trees and collecting data about the tree height, health, volume, and canopy area. The use of this geospatial intelligence is becoming widespread, with smallsat companies like Planet leading the market. Aerobotics’ platform uses artificial intelligence to analyze the images to detect problems. Farmers then use the startup’s Scout app with GPS coordinates to locate and document individual problems on the ground:
The company provides some of its basic app services for free, then charges $3 per acre, per month to add drone monitoring. Farmers confident in their piloting skills can shave a buck off the per acre, per month price.
Founded in 2009, SyeComp out of Ghana is developing a complex geospatial survey and mapping system by using optical and radar remote sensing technologies, as well as imagery picked up by drones. The overall product range includes farm mapping, localized weather forecasts, and even a mobile crediting solution called mFarmPay that generates a credit score for rural farmers from that data it collects. As we’ll see more below, getting money into farmers’ hands is one of the key goals of many of the African AgTech startups.
Financing Agriculture in Africa
Founded in Lagos, Nigeria, in 2016, with $1.4 million, Farmcrowdy is a collaborative food production platform that matches sponsors (i.e., micro-investors) with farmers. Sponsors use the platform to find the type of farm – agriculture, poultry, dairy, for example – that they want to invest in. Once the farmer completes a full harvest cycle (or a set time in the case of a poultry farm), Farmcrowdy helps the farmer sell its products. The company then disburses the profits, giving 40% to the farmer and 40% to the investor, er, sponsor. The other 20% in feudal fees goes to Farmcrowdy. And we thought PayPal should lower its fees.
For farmers unwilling to take on a feudal lord, there is always the more conventional option of taking on crushing debt. Kenya is home to a large share of African AgTech startups, including the fintech startups FarmDrive. Founded in Nairobi in 2014, with undisclosed funding (including a round this month) the company runs a credit scoring system that links local financial institutions with eligible farmers for issuing loans to those without traditional credit scores, which is also a thing in the First World for those who eat avocado toast.
Instead of manual loan approvals, the mobile platform combines a bunch of individual, social, environmental, and agricultural data to assess farmer’s creditworthiness using machine learning (of course), singling out those who are most likely to default on their loans.
Since its start in 2016, the Nairobi-based Apollo Agriculture has raised $1.6 million to help farmers maximize profits and minimize credit risks with machine learning, remote sensing, and mobile phones technologies. It combines the services of both FarmDrive and Farmcrowdy by assessing credit risk, while also delivering individualized information packages specific to the farmer’s location based on data picked up from satellites, soil, farmer behavior, and crop yields. A lot of what is being accomplished by these three financing startups sounds similar to what we observed happening in the Indonesian farming sector.
Supply Chain Management
Founded in 2013, iProcure has raised about $1 million in venture capital. The Nairobi-based startup provides a multifaceted market intelligence platform for supply chain management, monitoring sales prices in remote locations, and supporting built-in mobile payments. The company also assists with warehousing, using “predictive algorithms [to] ensure that essential commodities are never in short supply,” as well as last-mile delivery. On the other side of the financial coin, iProcure helps retailers identify geo-located purchasing patterns in real time, in turn helping them offer targeted loyalty programs and discounts to farmers.
In addition to war, poverty, and starvation, you might be surprised to learn that Africa also has serious problems with access to water, so it could use some innovative water technologies. It does, however, have plenty of sunlight. The Kenya AgTech company Futurepump, founded in 2011 used an undisclosed Seed funding round to invest in solar power. Farmers make a one-off investment to buy a surface pump that can suck up to one liter per second of shallow water to irrigate surrounding crops. The pump is made of three parts – PV panels that convert sunlight into electricity and drive the DC motor, a unit coupled to a flywheel that drives the pump, and a reciprocating piston pump:
Here’s a case study to break the heart from a farmer named Japheth:
“I used to irrigate with buckets but I could not do much because the bucket capacity is very small. I tried a MoneyMaker pump, but it was so labor intensive that I ended up spending much money hiring people just to help me pump the water. I also tried petrol, but I would use $10 a day – this cost is too high. So, if I didn’t have the Futurepump, I think I wouldn’t be here now in the dry season because it is already too hot. But with the Futurepump now I know I will harvest something good.”
Keeping Stock with Drones
Once you’ve picked the harvest with delicate agricultural robotics, you should store it somewhere safe, and be able to locate it and count it fast. Founded in 2014, in Durban, South Africa, DroneScan is a fast-paced inventory counting system for warehouses. It basically has two types of inventory counters: DroneScan Hadeda and DroneScan Buffalo. Named after a local bird, Hadeda can be used either as a supplemental drone to an existing warehousing system or as a complete solution, which includes a flying drone and the accompanying software and file integrations.
Buffalo got its name due to its red horn-shaped sensors. It actually doesn’t fly, but is mounted on a forklift, which uses horizontal and vertical motion to safely locate and count pallets and scan barcodes.
Agricultural networking and shared best practices are big in African AgTech. Even more startups are focused on collective benefits for small-scale farmers. As reported by McKinsey, African banks make a “refreshing contrast to the overall decline in banking growth.” Therefore, it’s not a big surprise to see that African AgTech has been mostly concerned with investing in data management, improving farmers’ knowledge, and increasing access to capital, in order to fight severe drought and food shortages, and less on finding the best places for brunch and avocado toast.
Do you want to trade stocks for free? TD Ameritrade has completely eliminated commissions for stocks, ETFs (domestic and Canadian), and options. Open up an account with TD Ameritrade today and make brokerage fees a thing of the past. Learn more.