Kenyan agrifoodtech start-ups have raised the most in the past 10 years attracting USD 608 million (KES 89.8 Billion) in investment. The figure represents about a third of the total funding African agrifoodtech start-ups have raised since 2013.

In total, African start-ups in this sector have received investment funding that adds up to USD 1.8 billion (265.86 Billion shillings) in total. According to AgFunder, the lion’s share (95%) of the funding was taken up by only four countries.

Big Four Agrifoodtech Countries

The KES 89.9 Billion investment in Kenyan start-ups led to 178 deals closed. This meant the country had the most deals in agrifoodtech closed in the last decade. Nigeria was second in the list with 150 deals closed after receiving USD 448 million.

Egypt was the highest ranked North African country attracting USD 317 million in investment. South Africa closed out the big four with USD 270 million in total funding received since 2013.

Over the decade, there has been a 25% year-over-year increase in funding up to the year 2022 when Africa raised USD 636 million. Kenya’s Wasoko raised the biggest round of 2022, bringing in $125 million for its technology connecting small shops to the digital economy. Nigeria’s ThriveAgric; and Egypt’s MaxAB, are among the other start-ups that received strong funding.

In contrast, Agrifoodtech companies raised USD 29.6 Billion globally  in the same year. This means less than 2% of global funding to the sector went to African start-ups.

Agrifoodtech Funding in Sharp Decline

Alarmingly, there has been a sharp drop in funding for the first half of the year 2023. This comes after the record breaking funding in 2022. Global macroeconomic conditions characterized by rising interest rates and currency volatilities instigated by a strengthening US dollar have made investors shy.

This has been the case across the start-up landscape in Africa.

In the first half of 2023, agrifoodtech start-ups have seen funding drop by 77%. For that half, Kenyan and Nigerian start-ups raised nearly the same amount of funding. The two countries raised 41 million USD, and 45 million USD respectively.

What is concerning about the drop-in funding, is that the agriculture industry employs about 70% of the continent’s population. For instance, Kenya’s Twiga Foods has shed about 33% of its workforce recently. This is despite the company raising KES 23.62 billion (160 M USD)  in the last decade.

Lack of Innovation In Agriculture Sector

Despite vibrancy in innovations, the level of sophistication remains low in Africa where agricultural practices largely remain menial. Deals in farm robotics and mechanization, for instance, remain low at only 1.3% of the funding received. Further, the refusal by African countries to embrace genetically modified organisms (GMOs) has led to scarce biotechnology innovations.

Smart farming solutions in Africa are scarce. In contrast, at the global stage, this category is often one of the most active by number of deals closed each year.

In recent years, technologies that are that are bringing farmers and retailers online and giving them better access to goods and services have been receiving more funding.

African companies offering midstream technologies have received more investment capital over the past five years. This is because the main problem in African agriculture is post-harvest losses.

Post-harvest losses in the continent are estimated to be at 40%. Hence, start-ups that link producers with consumers, give farmers access to funds, eliminate logistics bottlenecks, and facilitate agricultural diversification keep attracting investment.

Notably, a good number of the Africa-focused agrifoodtech that received funding in the last 3 years do not have their headquarters within the continent. These types of start-ups received funding amounting to USD 314 million representing 46% of total funding between 2020 to 2022. Some start-ups begin operations in the continent but later move their headquarters to Europe or the USA.