Poultry business raises $14m from AgDevCo, AHL, others
Flow Equity, a poultry business targeting underserved rural households, has raised a combined $14 million funding round with participation from AgDevCo, AHL Venture Partners, Acumen Resilient Agriculture Fund (ARAF) and the Bill & Melinda Gates Foundation. The company mainly operates in Ethiopia via its investment in EthioChicken, and Rwanda and Uganda via its subsidiary Uzima Chicken.
Co-founder David Ellis, who has more than a decade of experience in emerging markets explained, “We started the company with the mission to make farmers healthier and wealthier, and this investment will enable us to reach many more farmers across sub-Saharan Africa.”
The company’s primary product is high-yielding day-old chicks, which are sold in a package including feed and vaccines to its network of trained agents who grow the chicks for a month to produce healthy, vaccinated pullets and cockerels that are then sold to smallholder farmers. The world-renowned breeds produce three to four times more eggs in comparison to local chickens and reach over 2kg in three months in the village environment, representing at least a 3x gain in productivity for smallholder farmers. Its inclusive distribution model and proven breeds enable Flow Equity to meet the fast-growing demand for protein among the mass market at the bottom of the pyramid.
Co-founder Joseph Shields said, “We are very proud to supply dual-purpose poultry that is perfect for the smallholder farmer in our markets in Africa. The chicken is resistant to disease and highly productive for both meat and egg production compared to the local chicken. Our model requires less feed per kg of meat or egg produced, which is critical in this period of high grain prices and reduces the environmental impact from animal farming.”
Founded in 2010, EthioChicken has become the industry leader in Ethiopia selling over 25 million chickens per year. EthioChicken has received funding from international impact investors, including the IFC and FinnFund.
Building from the success of EthioChicken, the company launched Uzima Chicken in 2017 entering Rwanda and Uganda respectively. With over 100% dual-purpose poultry market growth in both countries, it is witnessing strong market penetration supported by its 1,000+ agents and 500,000+ farmers’ network.
Ellis said, “We have shown the scalability, impact, and profitability of our model in Ethiopia, and believe we need to make our products available to access the enormous market opportunity serving farmers throughout Africa. We are honored to work with these investors that support this long-term vision.”
The funding will primarily be used to expand its operation to other African markets.
“There are few better examples in African agriculture of investments delivering both impact at scale and healthy financial returns than Flow Equity,” said Chris Isaac, chief investment officer at AgDevCo. “We’re delighted to have backed the company to set up operations in Rwanda and Uganda and we’re excited to support the expansion into new countries.”
“We believe that the company accesses a huge addressable market supported by the growing population, rising disposable income, and increasing demand for nutritious food. Flow Equity’s outstanding traction has demonstrated a solid commercial case for us, its mission-driven business further aligns with our impact DNA. We can’t wait to support the team in executing its growth plan, hereby improving the income and food security for many more households in Africa,” said Rosanne Whalley, CEO of AHL Venture Partners.
“Flow Equity’s unique business model has a significant impact on the climate resilience of smallholder farmers. Adopting dual-purpose poultry helps farmers increase, and diversify their sources of, income and reduce their income volatility which helps farmers adapt to climate change. We are very excited to support a world-class team such as FE’s and look forward to being part of their quest to impact more than five million African farmers,” said Tamer El-Raghy, MD of ARAF.