The distance between their farms and the closest processor is essential for smallholder farmers who must course of their crops. And although Nigeria’s meals processing techniques have a eager resemblance to the West with respect to large factories and big economies of scale in high-demand cities, farmers nonetheless undergo from poor logistics networks.
With distance and logistics issues, farmers’ crops can go unhealthy and when factories purchase them, it impacts their processing yields and worth. Farmers, witnessing post-harvest loss, additionally receives a commission much less and miss the chance to put money into their crops manufacturing.
Nigerian agritech startup Releaf is fixing this by constructing proprietary {hardware} and software program options to make these farmers and meals factories extra environment friendly and worthwhile. Today, the corporate is asserting that it has raised $2.7 million in seed and grants in the direction of this effort.
Pan-African targeted enterprise capital companies Samurai Incubate Africa, Future Africa and Consonance Investment Managers led the spherical. Individual traders like Stephen Pagliuca, the chairman of Bain Capital and Justin Kan of Twitch additionally participated.
In addition to the seed spherical, the agritech startup secured $1.5 million in grants from The Challenge Fund for Youth Employment (CFYE) and USAID.
Founded by Ikenna Nzewi and Uzoma Ayogu, Releaf focuses on worth chains the place smaller factories are arrange close to smallholder farmers. This permits them to get higher processing yields and fewer logistics prices; ultimately, the farmer has extra money to work with.
When the pair began the corporate in 2017, the concept behind Relead was not concrete but because the workforce, primarily based within the U.S., had not found out product-market match.
First, it deliberate to extend productiveness in Nigeria’s agricultural sector utilizing software program. Even after graduating from Y Combinator’s summer time batch that yr, Releaf toyed round with concepts round commerce finance and a market for patrons and sellers of agricultural merchandise.
The workforce would get a clearer image of what it wished to construct when the founders moved again to Nigeria. The Americans of Nigerian descent toured throughout 20 states and studied completely different worth chains for crops recognizing inefficiencies that would be solved by know-how.
“We took a way more broad strategy to what the answer can be, however we actually wished to resolve on a selected crop to work in. And we discovered that chance within the oil palm sector,” Nzewi stated to TechCrunch in an interview.
The oil palm market in Nigeria is a $three billion one with over Four million smallholder farmers cultivating farms the place these crops are planted.
These farmers drive 80% of the manufacturing of oil palm. But because the trade is kind of fragmented, they’ve many challenges processing the oil palm as a result of it’s a crop that requires critical processing energy to extract vegetable oil from it.
Image Credits: Releaf
Farmers sometimes undergo this course of by utilizing rocks or inappropriate {hardware} — ineffective processes that result in low-quality oil palm largely unfit as enter for high-quality vegetable oil manufacturing.
Nzewi says the workforce noticed a possibility and got down to construct a know-how to assist farmers crack oil palm nuts. The end result was Kraken, a proprietary patent-pending machine.
So right here’s how the corporate’s enterprise mannequin works. Releaf buys nuts from the farmers, then makes use of the Kraken to crack the nuts and crush the kernels into vegetable oil. Releaf then sells the vegetable oil to FMCG processors and native producers, primarily in Nigeria’s south-southern area.
“Nigeria has about 60% extra demand for vegetable oil than it does provide. And it cannot be met as a consequence of provide shortfall with imports as a result of the federal government banned the importation of vegetable oil. So there’s a must take these smallholders who’re driving 80% of manufacturing and make them extra environment friendly in order that we will have a greater stability of provide and demand for vegetable oil,” Nzewi stated in regards to the ache level Releaf is…
