Farmcrowdy is Nigeria’s first digital agricultural platform, and a pioneer startup in the country’s growing agritech space. They exist to join two ends of the agro-funding spectrum: farmers who need to finance their field operations, and individuals willing to sponsor those operations and reap returns on their investment.
When the startup was launched in 2016, agritech was hardly a thing in Nigeria. Its founder, Onyeka Akumah, and his team (comprising of professional friends) were eager to help the general drive towards diversifying Nigeria’s revenue sources.
They had seen the difficult relationship that smallholder farmers had with the formal lending institutions and had figured that they could solve the former’s funding problem by channeling investment from people who wanted their savings to yield more money for them. The team recognized this opportunity for what it was and jumped on it.
Farmcrowdy depends largely on digital technology to connect both farmers and sponsors. It reaches out to crop growers and livestock tenders on the ground in several states across the country, vets them, and selects qualified farmers. Because a lot of its farmers are part of farming cooperatives in their local communities, it’s easier to hold them accountable for the funding that they receive.
Where there are specific projects from these farmers that require financing, Farmcrowdy puts them up on its website so that potential sponsors can have a look. A sponsor is anyone who invests in one or a number of the farming and agro-processing projects listed. They will need to register on the platform to be able to invest in a listed farm.
Farmcrowdy deploys the funds from sponsors for the purchase of farming inputs. It also trains the farmers, insures their farm produce, and helps them market the produce reaped from their fields. Sponsors get updates on the progress of the project they invest in text, videos, and pictures shared to their dashboard on the platform.
When the produce is harvested and sold, sponsors receive their money back, along with the return on their investment (ROI). The ROI rates are regularly in double-digit percentages. Sometimes, they may cross the 20% mark.
Thus far, Farmcrowdy operates in 14 states and has over 25,000 farmers signed up with it. Thanks in part to global VC funding, it has raised in a number of investment rounds and has been able to expand operations quite rapidly over the last three years. The latest of these was a $1 million investment from Cox Enterprises, Techstars, and local investor Ajayi Solutions which was announced in March 2019.
Recently, it merged with its sister companies Farmgate Africa (an agricultural commodities trading platform) and Agrisquare (an online community for agriculture enthusiasts). The company has explained that the merger is intended to expand the range of investment options that sponsors on its platform have.
Featured image source: Farmcrowdy