The myriad challenges faced by small African farmers (insufficient financing, education, and distribution of inputs) continue to have a significant impact on agricultural production on the African continent. However, startups offer innovative solutions to these problems, South africa Kura Here is an example. Launched in 2018, the startup is finding its niche in a growing industry.
Today, we announced a $ 1.3 million seed round to expand our business nationwide.
On the surface, African agricultural technology does not seem to take off so exponentially. Other technology management industries. But it is: The agricultural technology sector grew 44% year-on-year between 2016 and 2019, with the continent having the most agricultural technology services in developing countries, reaching more than 33 million smallholders. .. report Farmers Review from Africa.
Karidas Tshintsholo, Matthew Piper When Jackson Diora Founded Khula three years ago. Khula provides smallholders with software and markets to grow their business.. But This explanation does not justify the painstaking problem that Khula is solving.
Before Khula, Tshintsholo and Piper were school and business partners. They worked on a consulting gig after dropping out of college a year before graduation.. However, while it allowed them to meet clients in various disciplines, the consulting business was not refreshing enough.
“We always wanted something more influential, something more meaningful, something we could do. true It will change the way the world works, “Tshintsholo told TechCrunch. Over time, from the experience of both founders, agricultural technology seemed to be the way to go...
Africa has 60% of the world’s arable land. research It also shows African agricultural technology Will be projected It will reach a value of $ 1 trillion by 2030. But the trip to Israel wondered why the country-despite half of its territory being considered desert-had more produce than African countries.
“It didn’t make sense for us to have more land than any other continent,” said Tshintsholo. “And almost everyone on the continent is a farmer, and we buy more food than we sell. Given the competitive advantage of agriculture, I wondered why it was possible.?? ”
Further research and spending time with the farmers revealed another problem. It’s how intermediaries robbed smallholders in the country.
South African agriculture Are known Supports industrial agriculture. And, like most parts of Africa, smallholders are in a difficult situation as they face many challenges, from marketing and sales to the transportation of goods and produce.
Normal, Farmers carry their produce to a large warehouse, where a large aggregator picks up and sells the produce.. The problem here is that most products For sale Consignment sales, that is, there is no guarantee that farmers will sell.. Most perishable items will also experience price declines.Significant lack of transparency allows intermediaries to rip off farmers..
“”Let’s go The penny I dropped for us was when we started detectives. We tracked these farmers and realized what the big companies listed on the stock exchange were doing. Go to these physical markets, pick up your produce and sell it to the formal market. They receive it at R3.50 and sell it at R11.00.they literally Did not add anything to the value chain However Pick it up and take it down. “
In some cases, farmers can sell their produce Then to a processor who sells to supermarkets at a much higher price. Supermarkets are also making a profit by selling to individual consumers.. Therefore, what a farmer sells for R3.50 ($ 0.24) can be in the hands of individual consumers for R30 ($ 2.07). That’s not all; farmers also have to pay fees to these intermediaries and municipalities in which they operate...
“This was when we learned that this was a struggle, and this was the problem we wanted to address,” said Tshintsholo. “But we didn’t go live when dealing with that issue. Initially.. Agriculture can be very complex. What we currently have is what is called the Khula ecosystem. This is because the industries are very interrelated. “
Khula wants to address all these issues at once and provide farmers with liquidity, access and markets... The platform is an ecosystem made up of three products.
The Inputs app gives farmers access to agricultural inputs and services approved by local and international suppliers.
The second is the Fresh Produce Marketplace. target In the farmer with the problem quoted above.. It allows farmers to sell produce Directly To official domestic and international bulk buyers.. The platform aims to reduce the access of intermediaries that have led to the exploitation of farmers by allowing them to negotiate prices with their suppliers.
Second, Funder Dashboard connects institutional investors with farmers who meet their funding obligations.
“We chose this ecosystem approach because it’s a more tenacious business model,” says Tshintsholo. “Therefore, we want farmers to use our ecosystem to buy the products they need and get the services they need.”
Khula has been a significant traction since its launch. The company has contracts with more than 3,000 farmers and currently more than 100 suppliers are working with the company...Startup this year was Accepted Participated in Google for Startups Accelerator Class 6 with 14 other African companies.
Company However We announced this investment and ended the round last year.It Guided by AECI, One of the largest pesticide companies on the continent. South African impact investor ESquared Investments also participated.
father In addition to the financial firepower Khula receives from key investors, it also allows access to AECI’s extensive distribution network to extend its input app. With 132 depots nationwide, Khula states that it can deliver products in all states and all major agricultural areas...
Tshintsholo states that AECI is the kind of investor that Khula expects as it progresses. That is, a long-term partner who is interested in doing it, not quarterly updates.
“We didn’t want investors to just ask how they did well in a particular quarter. We wanted a long-term partner to work with us. Industry-acclaimed partners and incredible distribution networks, long-term successful partners Tie For a business model like us.And AECI fits that description completely For us. “
“Khula has a very attractive fundamentals, a large addressable market, app development capabilities, a major agribusiness network, and a management team who wants to work as an agribusiness and technical advisory partner to prioritize AECI. Yes, “said Quintin Cross, Managing Director of. AECI Plant Health said in a statement.
https://techcrunch.com/2021/08/03/south-africas-khula-closes-1-3m-seed-to-scale-its-software-for-agriculture-platform/ South Africa’s Khula has closed $ 1.3 million in seeds to expand its agricultural software platform, TechCrunch.