Farmerline Group, a Ghanaian agribusiness marketplace today announced the second close of a Pre-Series A round with an additional $1.5 million investment from social impact investor Oikocredit.
The investment is part of a total funding round worth $14.4 million raised by Farmerline from investors including Dutch development bank FMO and Acumen Resilient Agriculture Fund (ARAF).
The new round of financing will be used to strengthen Farmerline’s supply chain in agribusiness and further develop the startup’s infrastructure.
Farmerline had raised $13 million in April this year, which included a $6.5 million pre-series A equity round backed by ARAF and FMO. [Disclosure: FMO sponsors AFN through its network partnership with our parent company, AgFunder.]
The rest was a $6.4 million debt round from DEG, Rabobank, Ceniarth, Rippleworks, Mulago Foundation, Whole Planet Foundation, Netri Foundation and Kiva.
It recently started plans to expand its operations into Ivory Coast in a bid to help farmers facing increased fertilizer prices and shortages. As the company deepens its presence in West Africa, it plans to reduce the cost of farming and increase yields for farmers on the continent through the deployment of AI technology and local infrastructure.
How it works
Farmerline was started with an $800 grant by Alloysius Attah and Emmanuel Owusu Addai in 2013. At the time, it was delivering timely agronomic voice messages to 800 farmers across Ghana through its technology platform Mergdata.
Mergdata, the startup’s own globally-licensed platform, was on Time’s list of the top 100 innovations of 2019. Farmerline has leased Mergdata to over 60 partners mainly in Africa and others in Asia and Latin America, which facilitates farmer profiling, traceability, messaging and digital payments.
It is now looking to evolve the Mergdata platform, making it more AI-powered to deliver intelligence such as crop yield prediction, fertilizer demand forecasting and product traceability needed in the industry. It claims to have reached over 1.5 million farmers in 35 countries via the platform.
Farmerline also offers input financing to farmers through organized groups, climate-smart farming education, logistics services, access to high-quality fertilizer and seeds, and other digital tools while connecting them to agribusinesses in international markets.
It claims to have financed around $18 million worth of inputs and crops through franchise shop alliances with agribusinesses and input dealers.
In Ghana, Farmerline engaged with over 77,000 farmers last year, directly selling products to them and buying their crops. The team projects that this number could go up to 140,000.
Partnership with Oikocredit
Oikocredit has been a longstanding player in the SME microfinance industry and has invested in partners working in the agricultural sector, financial inclusion and renewable energy sectors across Africa.
According to Emmanuel Owusu Addai, co-founder and COO of Farmerline, the partnership embodies the alignment that both bodies have when it comes to solving the challenges in farming in West Africa.
“We have chosen these investors because of what they bring. It is because they’ll not only bring in the funding that is needed, but they are bringing support which is not very easy to find,” Addai tells AFN.
“These are organizations that have been working on the African continent for a while. They’ve been invested for some time and understand the challenges, especially in our particular situation. We believe these are the corporate investors that understand why we are doing what we do in Farmerline and are willing to go beyond just the funding to make sure that we can succeed and expand our frontiers.”
Addai believes the partnership will make it easy to learn from Oikocredit and access resources in relation to Oikocredit’s experience in asset financing, which can be applied in Farmerline’s input financing services.
“It is always an opportunity to learn from people who have done credit management and asset financing. We believe the synergy is going to be great and the input dealers, aggregators, and farmers are going to benefit from this,” he says.
Support a Farmer Initiative
Farmerline witnessed the real-time impacts of the hike in fertilizer prices resulting from the Russia and Ukraine war.
Last month, it launched the Support a Farmer initiative, a public crowdfunding campaign to raise GH¢1 million ($ 100,000) with the aim of providing 250,000 bags of discounted fertilizer to 25,000 farmers across Ghana.
“Because of the Russia-Ukraine war fertilizer prices have skyrocketed almost three times what it was last year. We realized as a company we needed to reason with the agribusinesses and the farmers that we work with and do something that will help them acquire the fertilizers,” Addai says.
“In a recent Farmerline survey, we found that more than half of the Ghanaian farmers we spoke to hadn’t applied any fertilizer to their crops just weeks before the end of planting season. An additional 33% said they’ve only partially applied the fertilizer they need. It’s simply too expensive, and therefore imperative for us to not only do something to soften that burden but also provide an opportunity for everyday Ghanaians to stand in solidarity with the farming community during this turbulent time,” Alloysius Attah, co-founder and CEO of Farmerline adds.
What they’re saying
“We remain committed to standing by farmers and agribusinesses across Africa during this crucial time. With the support of Oikocredit alongside our first-round funders, our distribution, logistics and financing services will continue not only in Ghana but also in Ivory Coast where we’ve recently begun the process of expanding our team,” says Attah.
“Now is not a time for business as usual. We need to work closely with all partners and stakeholders in the agricultural sector through this critical period to create sustainable food system solutions that benefit African farmers,” he adds.
“The harmful impact of rocketing fertiliser costs on smallholder farmers in Africa is clear. With our investment in Farmerline, we are supporting those most affected by the price volatility. Our investments in the agriculture sector are at the core of Oikocredit’s work as a social impact investor, and we have already identified synergies with other portfolio companies. We are thrilled to support Farmerline Group and smallholder communities across Ghana and Ivory Coast,” says Mila Georgieva, equity officer at Oikocredit.
