AgDevCo Ventures secures £25m to back early-stage agri-SMEs

AgDevCo has landed £25 million from the UK’s Foreign, Commonwealth, and Development Office to establish AgDevCo Ventures.

The UK Minister for Africa, Lord Collins of Highbury

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AgDevCo has announced £25 million of funding from the UK’s Foreign, Commonwealth, and Development Office (FCDO) to establish AgDevCo Ventures, a new investment strategy in the group.

AgDevCo Ventures will make smaller investments (£0.75 million – £2.5 million) than AgDevCo's main investment strategy with a focus on early-stage agri-SMEs and with the aim of building the next generation of African agribusinesses. Initially, AgDevCo Ventures will invest in East African countries where AgDevCo is already present (including Kenya, Uganda, Tanzania, Rwanda). Over time, AgDevCo Ventures will expand to other countries and regions.

AgDevCo Ventures will support the development of commercial agriculture on the continent, achieving impact through job creation and by linking smallholder farmers to market opportunities.

FCDO’s backing will enable AgDevCo Ventures to invest in small agri-SME investments in the “missing middle”, where private investors are often deterred by high risks and transaction costs. The portfolio is expected to include a high proportion of African and female-owned or managed businesses.

AgDevCo Ventures will be a ring-fenced investment subsidiary within the AgDevCo group, with a dedicated team based in its Nairobi office and drawing on specialist expertise from across the organisation. AgDevCo Ventures is in the process of raising a further £20 million of impact investment capital from development finance institutions and family offices, with the expectation the company will start operations in early 2025.

The UK Minister for Africa, Lord Collins of Highbury said: “Improving food markets will have a game changing impact on individuals and families across Africa. Giving hard working farmers stable incomes, creating jobs for the youth and helping end malnutrition. Without access to funding, no matter the drive and ingenuity, too many businesses can’t get off the ground. That’s why I’m pleased to announce that the UK intends to back a new $50 million facility called AgDevCo Ventures. The UK will put in over half the funds, with AgDevCo collecting funds from other investors. AgDevCo’s funding and expertise will enable early-stage African agribusinesses to grow and increase Africa’s resilience to climate change.”

AgDevCo CEO, Daniel Hulls said: “We are very grateful for the continued support from the UK government. This funding will allow us to leverage third-party capital and go back to investing in small, early-stage businesses. We are excited about building the Ventures portfolio and expect it to be to be high impact, delivering jobs and increased rural incomes and helping to build the next generation of African agri-SMEs.”

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