Farmcrowdy has announced a restructuring of its business as it seeks to diversify services and expand into new regional markets. The agritech startup, which was launched four years ago, has also created a new digital trading platform for smallholder farmers.
The company has created six business units:
- Structured Finance – to provide loans to farmers (90% of smallholders have no access to bank loans)
- Insurance – to provide insurance to farmers
- Marketing – a marketing solutions provider for farmers
- Tech and Data – providing market insights, market and yield predictions
- Foods – consumer-facing ecommerce – the app had 3,000 orders between April and July 2020
- Aggregation – trading platform for smallholders
Farmcrowdy points to the fact that there are 38 million smallholding farmers in Nigeria and 90% are “unmodernised” – unable to access finance to improve, not using technology, and not plugged into a wider value chain.
A big issue is that Nigerian farmers loses N3.5trillion ($9.17bn) to post harvest losses every year due inefficiencies in harvesting techniques, storage, product handling, transport. Studies elsewhere have found that some fragile crops may pass through as many as 30 pairs of hands between farm and end consumer.
Without question Farmcrowdy is ambitious. The company plans to use Agricsquare, its own networking community platform with over 25,000 active members, to help drive expansion into Ghana, Kenya, Rwanda and possibly as far as the Caribbean. So far, it has raised just $2.4m in funding, a comparatively small amount for the sector. Its last funding round was in March 2019.
Arguably it is trying to do too much: in February this year it acquired Best Foods (L&P), a meat processor. In September 2019 its investment arm, Crowdyvest, launched a ride hailing app called Plentywaka. Crowdyvest, is described as an impact-driven platform that connects individuals to sponsorship (investment) opportunities.
