Nigerian agritech startup Releaf, which supplies raw materials (starting with oil palms) to consumer goods manufacturers and their food factories, has received $3.3 million in an oversubscribed pre-series A round.
The Jack Ma Foundation-backed startup has announced $4.2 million in seed funding (including $1.5 million in grants) in September 2021, which will be used to launch two new technologies, Kraken II and SITE. said to support
Releaf focuses on value chains that set up small factories close to small farmers. This improves processing yields and reduces logistics costs. Oil palm is the first and so far the only crop Releaf is working on. The Oil Palm Market is his $3 billion market made up of more than 4 million smallholder farmers. These farmers drive around 80% of their crop production using stone and inefficient hardware that causes them to produce low quality vegetable oil. That’s why agritech launched the Kraken. This is a static palm nut sheller built to process this crop and efficiently extract “high quality” vegetable oil for farmers.
“Our seed round is basically getting the first evolution of the Kraken and the first company to turn very poor quality smallholder palm nuts from multiple species into high quality palm kernel oil. We were focused on proving that we could be,” Uzoma Ayogu, co-founder and CTO, told TechCrunch in an interview.
“After proving it, we had to find a way to best deploy this technology dynamically. could be reduced to [Kraken II] while adding new products [SITE] To complement the set of technologies we already have. ”
The Kraken II is a mobile, inexpensive version of the palm nut sheller that costs half the price and eliminates over 80% of the cost of eroding your margins. SITE, on the other hand, is a geospatial mapping application that exposes food processing assets. SITE was developed in collaboration with his Professor David Lobell of Stanford University, a MacArthur Fellow and Director of the Center for Food Security and the Environment. The team refined an age-identification process for oil palm trees in Nigeria.
According to Ayogu, YC-backed Releaf believes that building technology alone is not enough for farmers and manufacturers to get the best returns, and that they are working to bring technology to the right place at the right time in different parts of Nigeria. I realized that I need to introduce the . This is the reason for Kraken’s portability and his SITE placement and route planning capabilities. The combination of both means that his Uyo-based Releaf will not be limited to sourcing crops within 100 kilometers of him from a fixed processing site like existing food processors, but rather the Nigerian oil palm belt. You can aim for the best opportunities across the board.
“The biggest advantage for them is [farmers] With this new evolution of Kraken and SITE, farmers have to pay a lot for logistics, so many farmers are offering cheaper prices. But now, having cut his 80% of the logistics costs and being able to process closer to the producers, we can pass much of that profit back to the producers while improving the quality of the final product. You can keep a lot of profit. Ayogu, who co-founded Releaf with his CEO Ikenna Nzewi, talks about why this new technology is important for farmers.
It’s not the case with Releaf, which is upstream and has less competition, at least when it comes to applying the technology. Providing farmers with better prices and working capital are two of his methods Releaf uses to gain market share in this segment, Ayogu said.
SITE developed by Releaf
The startup has processed over 10 million kilograms of palm nuts using supply chain technology since Kraken launched in 2021. After winning a supply contract worth more than $100 million from a Nigerian consumer goods manufacturer. The funding, which has tripled its valuation since its seed round, agritech looks to expand the area it processes palm and expand the types of crops it handles.
“Our insight is that downstream is limited by supply, which is upstream,” said the CTO. “Therefore, we are focused on first-mover advantage with differentiated technology, gaining massive supply in a fragmented market and verticalizing over time to improve our margins and market position. can be raised.”
Pre-Series A funding was led by Samurai Incubate Africa, which reinvested after leading Releaf’s seed round, with participation from Consonance Investment Managers. Stephen Pagliuca (Chairman of Bain Capital) and Jeff Ubben (Board of World Wildlife Fund, where he is the founder of Inclusive Capital Partners) also invested. Samurai Incubate Africa Managing Partner Rena Yoneyama said of the investment:
