ThriveAgric Emerges From Troubling Turmoil To Score Timely Turnaround
African agritech startup ThriveAgric is showing further signs of progress after going through a shakeup that upended its business and required a strategic turnaround of daunting proportions.
ThriveAgric today released its 2022 Impact Report reiterating the company’s mission to build a vast network of profitable farmers and accelerate an Africa that feeds itself. In the year under review, the Nigeria-founded company scaled its operations beyond Nigeria into neighbouring Ghana, and Kenya in East Africa, amongst other achievements.
In 2017, Uka Eje (CEO) and Ayodeji Arikawe (CTO) founded ThriveAgric as an agricultural technology firm that offered smallholder farmers access to financing, premium markets, and data-driven consulting. Crowdfunding—drawn from individual and institutional investors—was used to finance the projects in agriculture. Backed by Y Combinator, one of the most successful startup accelerators in the world, ThriveAgric had developed into a noteworthy African agritech firm within three years.
The startup would however suffer a tumultuous crisis following the disruptions caused by the Covid-19 pandemic through 2020. During that period, ThriveAgric would find itself struggling to fulfil its payout contracts. This did not go down well with its crowdfunding pool; much agitation and vitriol were directed at the company and its leadership, especially over social media as the startup teetered on the edge.
“It was a mix of different events,” Eje had told TechCabal in an interview last year, almost two years after the height of the crisis and in the midst of restoring its business. “The pandemic meant that off-takers couldn’t pay for the goods we’ve already supplied,” Eje said. “Farmers were also suffering losses in the farm, and we lost over NGN 100 M (~USD 210 K at current rates) worth of produce in transit because they were held up on the road. No movement during the pandemic.”
ThriveAgric would ultimately survive the storm as the efforts of its venture capital backers, most notably Ventures Platform, which brought in seasoned tech operator Adia Sowho to team up with Eje and other executives in key roles, noticeably paid off within one year from the point of peak panic.
Sowho, who had joined ThriveAgric temporarily from credit platform Migo and has since moved on to a CMO role at MTN Nigeria, the largest telco in the country, worked with the executives at the then-embattled agritech firm to secure a bridge loan and structure the financing plan for the repayment of the retail investors and hiring for key roles.
The effort stabilised the company and re-energised operations which gradually helped to clear the backlog of payouts by May 2021. The startup also emerged from the situation with a revamped business model that saw it nix retail crowdfunding from to focus on institutional investors. Retail crowdfunding in the agritech segment remains a fraught undertaking in Nigeria, evident in the recent unravelling of another notable player FarmForte under questionable circumstances, on top of several other cases of such platforms—which proliferated in Nigeria pre-Covid—going bust.
Since the pivot, ThriveAgric has bagged investment partnerships with several commercial banks, the CBN, World Food Program, and USAID. In March 2022, ThriveAgric announced it had raised USD 56.4 M in debt funding from local commercial banks and institutional investors to grow its farmer base and expand into new African markets. The agritech startup now identifies with empowering smallholder farmers, leveraging their technology to access finance and improve productivity and sales to promote food security. “ThriveAgric has 450+ warehouses and works with over 500,000 smallholder farmers in Nigeria, Ghana and Kenya,” the company shared in a new release.
Key highlights of ThriveAgric’s 2022 annual impact report include:
- Connecting with 514,000+ smallholder farmers in more than 2900 communities
- Pilot operations in 5 regions of Ghana and 6 counties in Kenya
- Invested over $100 million in financing
- Produced 1.5 million+ metric tonnes of grains
- 153.3 percent year-on-year increase in the number of women impacted
- 80 percent increase in youth impact in communities
To accomplish these milestones, the company leveraged its proprietary technology and key partnerships with governments and global institutions including the Ghana Commodity Exchange (GCX), Promasidor (Kenya) Limited, VISA, and OCP Africa, reveals a release shared with WT.
Speaking on the social impact, Eje, CEO and co-founder of ThriveAgric said: “In addition to the social benefits such as reducing poverty and improving gender equality, smallholder farmers that work with ThriveAgric produce double the national average yields due to access to better quality seeds, fertilisers and equipment. At ThriveAgric, we will continue to adopt a multifaceted approach that includes collaboration between various stakeholders, increased investment, technology adoption, and sustainable agricultural practices. Our 2022 impact report is a testament that we are on the right track.”
Access to funding remains one of the biggest challenges confronting smallholder farmers in Africa. According to the Africa Development Bank (AfDB), agri-SMEs in Africa are critically underfunded with an annual financing gap of approximately USD 100 B. ThriveAgric aims to bridge this gap by providing input financing, providing data-led advisory to improve output, enhancing supply chain efficiency, and encouraging sustainable agricultural practices with the aim of building a network of profitable smallholder farmers and contributing to a food-secure Africa.
Samirah Bello, Partnership Lead at ThriveAgric said: “At ThriveAgric, we remain committed as an impact-driven and customer-focused company. Through our strategic partnerships, we have been able to accelerate impact and reach meaningful milestones while tackling barriers confronting smallholder farmers in their day-to-day business. This report is an expansion of our 2017–2021 impact report, and we are proud to say that we have built a tech-driven agricultural enterprise that will eventually help feed both Africa and the rest of the world.”
Leaning into its Theory of Change (highlighted in the impact report), ThriveAgric aims to provide USD 500 M in credit to 10 million smallholder farmers across Nigeria, Ghana, and Kenya in 2027, and to double this outcome by 2050. The company will also be working with organisations that leverage its Agricultural Operating Software (AOS) to provide access to loans for their farmers and is currently onboarding partners. With food insecurity projected by the UN to rise to a record 310 million Africans by 2030, ThriveAgric has planned expansions into Tanzania, Egypt and Zambia to alleviate the potential impact.