The recent Agrinnovating for Africa report released by Disrupt Africa detailed the growth in funding for agri-tech startups on the continent, a trend which is continuing – as evidenced by the investment secured last week by Kenyan startup Tulaa.
Tulaa, which allows smallholder farmers to access inputs, credit and markets, raised a US$627,000 seed round to fund its continued expansion in the East African country and further develop its platform.
The oversubscribed US$627,000 funding round was led by AHL Venture Partners, and also includes investment by Global Partnerships/Eleos Social Venture Fund, Beyond Capital and Rafiki Ventures.
Tulaa was launched by Hillary Miller-Wise in July 2017 as a spin-off of Esoko, a pioneer in the use of mobile technology in agriculture. The startup has developed a mobile money solution that allows smallholder farmers to lay-away and borrow money to purchase inputs, while its virtual marketplace brings together suppliers, financial institutions and farmers.
“Four out of five families in Africa depend on agriculture for their livelihoods, but many are trapped in a cycle of poverty driven by lack of access to inputs, finance and markets. The unmet demand for smallholder finance alone in Africa is about US$30 billion. In Kenya, less than four per cent of all bank loans go to the agriculture sector,” Miller-Wise told Disrupt Africa.
She said Tulaa was the only end-to-end platform in Kenya that is removing barriers for farmers to access inputs, finance and markets, though startups are innovating in different parts of the ecosystem. Uptake has thus been quick.
“In one year, we’ve acquired nearly 10,000 farmers. We have partnerships with major input suppliers such as Syngenta, Toyota and OCP. We also have partnerships with banks and MFIs such as KCB, Juhudi Kilimo, Musoni and Rafiki Microfinance,” Miller-Wise said.
When Tulaa spun out of Esoko, several investors converted debt to equity into Tulaa, including Acumen and AHL Venture Partners. Even before closing the seed round, the startup received grant funding from donors such as USAID and CGAP, while in 2017 it was a winner of the Facebook Africa Innovation Challenge.
Miller-Wise said there are plans for future international expansion, but not just yet.
“We are focused in Kenya for now. Our plan is to break even in Kenya before expanding to other markets in East Africa,” she said.
The startup, which earns commission on the transactions on the platform, is due to break even by the end of 2019, but Miller-Wise said it has been faced with a number of hurdles. These included aligning the incentives of all partners on the platform, attracting – and retaining – talent in a competitive market, and raising enough capital to meet the demand.
The last issue, at least, has been overcome, and it will be interesting to monitor the future growth of Tulaa in a country that is building a reputation as a pioneer in the African agri-tech space.
