FarmWorks, a Kenyan agtech that gives farmers with entry to farm inputs, and marketplace for their produce, has raised $4.1 million in a pre-Series A spherical led by Acumen Resilient Agriculture Fund, an current investor. Livelihood Impact Fund, Vested World, various household places of work, and angel traders additionally participated within the spherical that introduced the entire fairness funding raised by FarmWorks to $5.6 million.
FarmWorks CEO, Yi Li, who co-founded the startup with Peter Muthee in 2020, instructed TechCrunch that they are going to use the funding to strengthen their knowledge analytics capabilities, and use AI to reinforce manufacturing, and affect planting and lending choices.
FarmWorks runs an out-grower scheme that brings collectively over 2,000 smallholder farmers, which has helped it to construct a provide chain community that ensures well timed supply of high quality produce. It plans to develop its community of contract farmers in different areas inside Kenya, along with the 2 counties within the central area of the nation, the place it’s at the moment operational and has 16 assortment facilities.
The startup supplies farmers with farm inputs, and pest management companies, and buys their produce for export, or native gross sales. It additionally supplies them with farming tools like drip irrigation kits, on mortgage.
“We are transforming what they are farming, and their income by introducing higher value crops like sugar snaps and snow peas, and finding the market. So, we become vertically-integrated from day-one in both the production and the distribution side of the business,” mentioned Li.
The startup is tapping gaps in Kenya’s agriculture sector, which accounts for 20% of the Gross Domestic Product (GDP) and employs 70% of individuals within the rural areas, in keeping with this report. However, whereas agriculture stays a important sector for the Kenyan economic system, small scale farmers, who’re the bulk, are confronted with a myriad of challenges, together with lack of high quality farm inputs, data on good agricultural practices, insufficient advisory assist, and unpredictable or unreliable markets.
The startup additionally teaches the farmers on good agricultural practices, which it demonstrates by itself trial farms.
“We have a strong belief that the huge issue facing farmers in Kenya is production — the low yield is mainly due to poor farming practices, and soil degradation that has happened over the years,” mentioned Li, who added that the startup is unlocking manufacturing and by boosting farmers’ capability. The startup sells about 400 tons of farm produce a month.
FarmWorks beforehand engaged in crop manufacturing by itself farms, which it has now became coaching facilities.
“There’s a lot of operational expenditure in running a big farm, and we realized that for the same efforts, we can cover a lot more farmers. That is why this year, we made a strategic decision to scale our out-grower scheme because that seemed to pick up much faster. We will be using our farms as training centers,” mentioned Li. Li beforehand labored in Kenya as a administration advisor for McKinsey, previous to launching FarmWorks with Muthee, who has been within the agriculture house for almost three a long time.