Agri-Business Capital Fund in Kenyan deal
The Agri-Business Capital Fund has invested $1 million in Apollo Agriculture, a Kenyan ag-tech which uses machine learning and automated operations technology to help small-scale farmers access the resources they need to maximise their profitability.
Apollo provides an optimised bundle for farmers that includes financing, farming inputs, advice and insurance. Apollo’s vertically integrated digital approach leverages machine learning and satellite data to service customers throughout the entire lifecycle, from acquisition, to credit decisions, and finally, collecting repayments.
Apollo acquires customers through a variety of digital marketing channels, and onboards them through their network of field agents, which currently numbers more than 1,200 across Kenya. These agents use Apollo’s mobile app and software to onboard farmers, including collecting the GPS boundaries of their fields. Apollo then uses machine learning models to evaluate customer creditworthiness. Once approved, the farmer receives a voucher code via SMS to redeem at one of Apollo’s 350-plus agro-dealer distribution partners in Kenya, who use Apollo software to manage last-mile distribution. The farmer is provided with seeds and fertiliser, instead of cash, and pays back the loan via mobile payments after harvest. The majority of Apollo’s customers farm maize, Africa’s most abundant staple food crop, but Apollo is building on previously run pilots to launch new crops and products that can enable a shift from subsistence maize farming to more profitable, commercial farming.
Apollo has grown rapidly, nearly tripling its customer base over the last year, despite the challenges of the Covid-19 pandemic. Through insights from interviews with over 240 Apollo farmers, 89% of farmers report productivity increases and 71% of farmers say their productivity has “very much increased” since working with Apollo.
The ABC Fund is providing a credit facility of $1 million to Apollo. Apollo will use the proceeds to continue scaling its ag-tech solution to reach more smallholder farmers who are unable to access microfinance and commercial bank lending. The investment will have a positive impact to improve food security and reduce food shortages in rural Kenya.
The ABC Fund is a blended-finance impact fund which provides catalytic financing to underserved yet profitable segments of agribusiness value chains in developing countries. Prior to the investment in Apollo, the ABC Fund has provided a total of $12 million in funding to three farmers co-operatives in Côte d’Ivoire, six small-and medium agri-businesses in Burkina Faso, Ghana, Mali and Côte d’Ivoire, and two financial institutions operating in Ecuador, Kenya and Uganda which on-lend to smallholder farmers.
Emanuele Santi, fund manager for the ABC Fund at Bamboo Capital Partners commented, “Apollo is an excellent example of a technology-driven business which is making a real difference to improve the lives of marginalised farming communities in Kenya. Apollo’s innovative solution to help smallholder farmers maximise profitability is proven, and moreover, it is directly improving food security and reducing shortages in the region. We are delighted that the ABC Fund now has the opportunity to play a crucial role in scaling Apollo to enable it to reach even more smallholder farmers and continue delivering a positive impact on the ground.”
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