Farmerline, a Ghanaian based agritech startup has raised $12.9million ($6.4m equity and $6.5m debt) pre-series A funds to strengthen its infrastructure which is warehouses and distribution channels.
Africa has the potential to meet not only its own food needs but those of the rest of the world. The continent is home to 60% of the world’s arable land. Its agricultural sector plays an essential role, contributing about 14% to the GDP (in Sub-saharan Africa) and employing a significant part of the population.
Nevertheless, the sector is plagued with different challenges that are impeding its growth. Some of them include lack of quality farm inputs, dependence on rain-fed agriculture, lack of access to technology, and best farming practices.
This is why Farmerline, a Ghanaian agritech startup, is stepping up to plug in some of these gaps. Farmerline is deploying technology to improve farmers’ access to high-quality production inputs, education on the best farming practices and how to navigate with the effects of climate change.
Founded in 2013 by Alloysius Attah and Emmanuel Owusu Addai, the agritech startup solutions are also designed to support a quick access to markets by farmers for better incomes and a reduction of post-harvest loss and waste.
With the new funds Farmerline will accelerate the execution of its plan to reach 300,000 farmers in 2022. It will also expand its operation in Ghana and in neighbouring countries like Ivory Coast.
The equity round was led by Acumen Resilient Agriculture Fund (ARAF) and FMO, the Dutch entrepreneurial development bank, with participation from Greater Impact Foundation. Debt lenders included DEG, Rabobank, Ceniarth, Rippleworks, Mulago Foundation, Whole Planet Foundation, the Netri Foundation and Kiva.
Speaking on the fundraise, Alloysius Attah said the agritech will use its first equity funding to build physical infrastructure like warehouses and distribution networks.
“We think of ourselves as the Amazon of farmers. A digital and physical infrastructure powering a marketplace that allows the movement of goods and services to and from rural areas,” said Attah.
“We plan to use the funding to strengthen our infrastructure, that is warehouses and distribution channels. Having a network of partners that can help us quickly move inputs like fertilizer and seeds to rural areas, and farm produce from rural areas, is important and part of what we do. We don’t intend to bring all of the logistics and storage in-house, but we want to be more efficient and that means working with the right partners,” he said.
Image Credits: Farmerline
Farmerline currently partners with agribusinesses (usually small retail shops that stock farm inputs) to ensure that farmers get access to high-quality supplies. These shop owners, usually the first point of knowledge for the farmers, are used by Farmerline to distribute educational material and to gather farmers together for training.
The partnering shops use the startup’s Mergdata, a proprietary AI technology platform for supply chain intelligence, to digitise the farmers they serve, and to generate the data the agritech needs to predict the demand of farm supplies.
“We are tapping into that network of agribusiness, and in a way, we are tapping into a network of trust — the relationship that these shop owners have with farmers to help us expand,” said Attah.
The partnership with retailers emerged after Farmerline realised that working directly with the farmers would amount to “competing with local businesses, and it didn’t make any sense. The cost of going door to door to each farmer was really high,” he said.
“Working with the agribusinesses made our businesses scalable, and it also helped us make more impact especially during the pandemic when we couldn’t travel — they became our eyes and ears on the ground. We sent trucks full of fertiliser and seeds to them that they would then distribute to farmers. That model worked really well.”
Through Mergdata, Farmerline can tell the performance of their partnering agribusinesses (retail shops), and develop a credit scoring program that guides the extension of business expansion loans.
According to the co-founder, the startup more than doubled its direct reach in 2021 to 79,000 farmers, up from 36,000 in 2020 and 8,000 in 2019. Benin, in West Africa, uses the platform as a national market information system.
Furthermore, through third party licensing for Mergdata, the agritech has digitised over 1 million farmers in 26 countries across the globe. Mergdata is used by 180 clients including governments, non-governmental organisations and agri-companies to ensure transparency in their supply chain and traceability