Zebu's Africa Food Security Fund backs South African company
Zebu Investment Partners, through its sophomore fund, the Africa Food Security (AFS) Fund, has successfully closed its investment in South African agtech company IQ Logistica (IQL). IQL is the owner and developer of a cloud-based platform used to collect, collate, and aggregate data for the purposes of tracing agricultural outputs and related key data as these progress through the value chain.
The AFS Fund focuses on food production and processing across Africa, underpinned by the assertion of the positive impact which investing in the agricultural value chain can have for food security. This investment represents the fund’s first foray into the agtech sector.
The genesis of IQL in 2015 was ignited by an effort to improve the South African cotton industry’s capacity and competitiveness and was supported by multiple stakeholders including the Department of Trade and Industry (DTI).
This big data platform has enabled complete value chain visibility within the cotton industry of South Africa (from farmer to retail store), with the ability to expand across various other agricultural value chains and countries. This presents an opportunity for high-growth and meaningful impact on a continent where agriculture plays a pivotal role in providing livelihoods and contributing to GDP.
The CEO and founder of IQL, Thomas Robbertse, believes the company has the potential to revolutionise the industry, “IQL sits at the centre of a disruptive movement – where farmers can be judged by their performance and not their balance sheets. IQL is enabling farmers to raise their profiles while providing services such as dedicated market access, competitively priced inputs, and access to finance and insurance. All these services reduce cost, remove uncertainty, and put more money back in the pockets of these essential workers.”
The AFS Fund will acquire a majority stake in the company, through equity funding.
In commenting on why the company chose to partner with a private equity fund, Robbertse asserted, “When we began our search for growth capital for IQL, we all agreed that it was imperative that any funder would have to understand the nuances of African agriculture. Zebu as a private equity team understands the journey of agriculture from farm to retail – we look forward to leveraging the relationships of Zebu as well as sharing ours to grow our ecosystems together. The additional resources such as the TAF (technical assistance facility) will extend our reach to farmers, small or large across the continent, which is really exciting for the team,” he further added, “This investment allows IQL to scale up our business quickly while enabling us to carry the upfront cost of customer acquisition and development in Africa’s nascent agtech sector.”
The AFS Fund’s technical assistance facility, once fully funded, will explore the possibility of funding inclusive projects targeting agricultural input suppliers and smallholder farmers within the respective value chains.
Zebu senior managing partner, Dennis Matangira, said in a statement, “At a time when the Covid-19 pandemic has further illuminated the need for traceability and transparency within food value chains, IQL presents us with an opportunity of not only resolving these pertinent issues; but also addressing the challenges of primary agriculture in Africa such as facilitating access to finance, and enabling efficient markets based on information symmetry.”
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