Crowdfunding Flaws: Nigeria’s Favourite Agritech Model Flunked Real Test

As early as 2010, even before the continent got hooked on the fintech frenzy, there existed a small group of new-age firms that set out to reimagine agricultural endeavour in Africa.

These firms came to be known as agritech startups. Even though they had first found turf in countries like Kenya, Nigeria, and Ghana, they have multiplied across the continent, especially since 2016, and now number over 100.

Their plan was simple. Simple, not easy. Basically, the idea now, as it was then, is “to increase productivity and efficiency in the agriculture value chain by deploying some form of technology.”

The words quoted above form the bedrock of most of the agritech business models operated in Africa today, and these models are typically built around such facets as financing, produce distribution, farm inputs, market access, crop monitoring, storage, mechanisation, and extension services.

Given that lack of sufficient funding is considered the primary impediment to efficient agricultural practice in Africa, much of the effort of local agritech startups have revolved around plugging the prevalent agricultural financing gaps.

“A lack of infrastructure and funding remain the biggest gaps to attaining scale by agric business, '' says Ayodeji Balogun, CEO of Nigerian agritech company, AFEX.

“Infrastructure requirements from logistics and poor road networks can increase operational costs, and funding can be difficult to raise,” he adds. 

And for most agritech startups looking to fix finance, plugging those gaps meant adopting the crowdfunding or crowd farming model which seemed to have become quite popular in Nigeria especially, at least until the pandemic happened.