Releaf, A Nigerian Agritech Startup, Receives $4.2 Million In Funding To Expand Its Services
Releaf, a Nigerian agritech startup, receives $4.2 million in funding to expand its services
Releaf, a Nigerian agritech startup, has raised $4.2 million in venture capital. Approximately $2.7 million in seed funding has been raised, with an additional $1.5 million in grants contributing to the total.
Samurai Incubate Africa, Future Africa, and Consonance Investment Managers were the lead investors in the funding round. They had the support of angel investors such as Stephen Pagliuca, the chairman of Bain Capital, and Justin Kan, the co-founder of Twitch.
Both the Challenge Fund for Youth Employment (CFYE) and the United States Agency for International Development (USAID) contributed to the project with grants (USAID).
Releaf, a startup founded in 2017 by Ikenna Nzewi and Uzoma Ayogu, aims to use new technology to improve the sale of high-quality raw agricultural produce while also boosting the value chain between small farmers and food manufacturers. Releaf was founded in 2017 by Ikenna Nzewi and Uzoma Ayogu.
Vegetable oil was the starting point for the company. It is they who purchase the nuts from farmers, break them up with a proprietary machine known as the Kraken, and then press them into vegetable oil, which is then sold to food manufacturers.
According to Techcrunch, Releaf claims that the Kraken processes 500 tonnes of palm nuts per year. Its software has provided 1,000 farmers with the means to produce 7.5 million KGs of high-quality crops by 2020, enabling them to support a total of 100,000 people. It now has over 2,000 farmers on board, who have collectively supplied 10 million kg of high-quality palm kernel nuts.
According to the startup, it has been able to increase the income of smallholder farmers by three to five times over the past few years.
Aim to Expand
The startup intends to use the seed funding to expand its offering by developing new technology that will be made available to smallholder farmers in the future. Additionally, it hopes to provide working capital to the farmers through the $1.5 million grant in order to aid their efforts to increase their production rate and, as a result, their earnings.
Our smart factories, in our opinion, can serve as an economic pillar in these rural communities, making it easier for us to provide these communities with other services that they may find valuable, such as access to working capital, payment for education, and access to insurance services. As a result, we consider food processing to be the first step in the value chain, one that solidifies our position.” Ikenna Nzewi, the CEO of Releaf, stated.
Vegetable oil is used in a variety of applications, including cooking and the production of industrial products such as paint, soap, and lubricants. The method most commonly used by oil palm farmers is breaking the nuts on rocks, which is a labor-intensive process that results in impure quality oil.
“Vegetable oil is in high demand in Nigeria, with demand exceeding supply by approximately 60%. Because the government has prohibited the importation of vegetable oil, the demand for vegetable oil cannot be met due to a shortage of supply. Consequently, it is necessary to improve the efficiency of smallholders, who account for 80 percent of total production, in order to achieve a more equitable balance between supply and demand for vegetable oil, according to the company's CEO.
After being accepted into the 2017 Y-combinator cohort, Releaf was awarded a $180,000 grant. Later, it was able to raise $1.3 million in funding from angel investors such as Eudaimonia Capital. This brings the total amount of money raised so far to $5.68 million.
Difficulties
It has been difficult for agritech startups to raise capital recently, making this a significant victory for the team at the moment. Now, they hope to expand into new areas because, according to the company's CEO, the startup is more interested in expanding into new geographies than it is in expanding into new crops. The style of cultivating and processing oil palm, according to him, is straightforward due to the similarities in cultivation and processing styles across West Africa.
Future Africa General Partner Iyin Aboyeji commented on the investment: "The team at Releaf is building the agro-allied industry of the future from the ground up, beginning with palm oil for which they have developed a novel technology to aggregate, deshell, and process into critical ingredients such as vegetable oil and glycerine." Future Africa is thrilled to support Releaf in their efforts to shape the future of modern agriculture.”
