World wide, most farmers have suffered totally different units of challenges in scaling and rising their farms. Though lending and crowdfunding platforms have popped up over the previous years, it’s nonetheless very troublesome for smallholder farmers to entry financing.
Some banks and different monetary entities have employed unsavoury and predatory techniques that have an effect on these agricultural companies in the long run.
In 2015, Geneva-based coverage advisory agency, Dalberg Global Development Advisors carried out some analysis about small-scale farming. From its findings, $450b was required to fulfill the wants of smallholder farmers all over the world. However these farmers solely bought $31b, which was lower than one-tenth of the supposed financing.
Coming nearer to house, The World Financial institution reported that whereas agriculture made up 18% of sub-Saharan Africa’s GDP, lending to the stakeholders within the agricultural sector represented just one%.
One in all such Africans to expertise the struggles of smallholder farming is Kenyan entrepreneur, Benjamin Njenga.
Whereas rising up, Njenga labored on his household farm along with his mom. She was a smallholder farmer who planted what she had entry to, low-quality seeds. As well as, she had little or no fertiliser and harvested solely 5 baggage per acre every year.
Njenga says that whereas they each knew what wanted to be carried out to extend manufacturing, they couldn’t afford credit score to purchase the required instruments.
Dwelling with this expertise, he would go on to check agribusiness and administration on the college and likewise work for ACRE Africa, a Nairobi-based service supplier working within the agricultural insurance coverage worth chain.
Pollak additionally had a background in agriculture. He labored for The Climate Corporation, a US-based agritech firm that used machine studying to supply optimised suggestions to assist farmers improve their yields.
Leaving the corporate in 2015 after it was bought for a billion , Pollak was additionally seeking to begin an organization that may assist African farmers improve their farm productiveness.
“I bought related with my founders with the identical mission. With my background and data working with farmers, and their technical abilities from the US, we made an ideal match to start out an organization to help farmers,” Njenga says to Techpoint Africa.
In late 2016, the trio based Apollo Agriculture. The purpose was to make use of machine studying and automatic operations expertise to assist small-scale farmers with every little thing they should maximise their profitability.
In accordance with Njenga, this was a vital resolution in a market the place most farmers are producing 10% of what US farmers are producing.
Fixing small-scale farmers’ credit score and operations downside
As earlier acknowledged, the overwhelming majority of small-scale farmers nonetheless can’t entry instruments like hybrid seeds, fertilisers, and insurance coverage that may improve their yield and revenue.
For Njenga, this boils down to 2 causes.
First, they lack entry to credit score and thus, can’t afford the price of well-understood high-return investments like hybrid seeds and fertilisers. Additionally, smallholder farmers are very rural, distant, and troublesome to succeed in.
Until date, approaches to smallholder financing have relied on human-driven and guide processes. The issue is these processes are expensive and sluggish to scale.
That is the place Apollo is available in, by digitising and simplifying these processes.
Apollo Agriculture builds credit score profiles for its small-scale farmers utilizing machine studying fashions. It does so by doing its due diligence of verifying the identification of farmers and taking satellite tv for pc coordinates of their fields.
The info obtained is then used to construct automated digital processes for every step in a farmer’s lifecycle from buyer acquisition to coaching to amassing the fee.
These processes, from amassing knowledge to analysing it to constructing credit score profiles guides Apollo in making lending and credit score choices to farmers at scale. Moreover, the corporate helps them entry rising ranges of their funding over time.
Njenga argues that there are only a few commercially viable approaches to small-scale agriculture financing in sub-Saharan Africa. To get it proper, an organization should have a novel mixture of abilities like software program growth and knowledge science, to say a couple of, and in his opinion, Apollo brings these abilities collectively, leveraging on experience developed at The Local weather Company, Tesla, and One Acre Fund.
He goes on to state that the corporate is amassing insights on a demographic in a means that hasn’t been carried out earlier than.
“We have now to do that in a really super-challenging surroundings the place farmers don’t have any monetary information like financial institution statements. And likewise, restricted data on topic issues just like the impression of local weather change.”
In accordance with him, the corporate has been in a position to develop instruments that these farmers would in any other case not have been in a position to entry due to the aforementioned challenges.
Progress and buyer acquisition
In 2020 alone, Apollo Agriculture has been in a position to shut 25,000 farmers. In whole, it’s serving greater than 40,000 farmers in Kenya.
Nonetheless, the group isn’t stopping there. It has plans to quickly scale by partnering and securing extra farmers and to that finish, the four-year-old startup raised a $6m Collection A in Might 2020. The spherical was led by Anthemis Exponential Ventures. Additionally in participation had been The Omidyar Group’s Flourish Ventures, Leaps by Bayer, and Sage Hill Capital, amongst others.
Njenga additionally mentions that the corporate is securing working capital funding to finance loans and grant funding to help analysis and growth (R&D).
After bringing its whole elevate to $7.6m, the chief buyer officer says Apollo is targeted on progress within the yr forward.
“We have now bought an excellent product that farmers love and we need to proceed to scale it.”
To drive house its mission of maximising farmers’ productiveness and profitability, per Njenga, Apollo is seeking to transition its clients from subsistence farming to business farming in order that they will make more cash.
“We’re additionally exploring new methods to help our clients significantly with the challenges round meals safety on account of COVID-19. We’re piloting a wide range of choices to finest help our clients by way of these difficult instances.”
Featured picture: Apollo Agriculture founders [L-R: Eli Pollak, Benjamin Njenga, and Earl St Sauver. Supply: Provided by Apollo Agriculture