FarmWorks, a Kenyan startup, receives $4 million in funding to expand operations.
FarmWorks, an agritech startup based in Kenya, has successfully concluded a funding round, raising $4 million in Pre-Series A funding to enhance its business operations. The company's primary focus lies in connecting farmers with essential farm inputs such as pesticides, while also purchasing their crops. It employs the widely adopted out-grower model, common in various African regions.
The funding round was led by Acumen Resilient Agriculture Fund, and it saw participation from Livelihood Impact Fund, Vested World, several family offices, and angel investors. With this recent funding, FarmWorks has now raised a total of $5.6 million since its inception in 2020.
CEO of FarmWorks, Yi Li, shared insights into the allocation of the funds, stating that the startup plans to strengthen its data analytics capabilities, leverage artificial intelligence to boost production, and utilize the funding to aid in making informed lending and planning decisions.
FarmWorks has successfully established an out-grower network consisting of 2,000 small-scale farmers, benefiting from a well-structured supply chain that ensures timely shipment of their crops. The startup currently sells 400 tons of produce on a monthly basis. In addition to providing a reliable market for the farmers' produce, FarmWorks offers loans of drip irrigation kits and other essential farm tools.
Yi Li emphasized FarmWorks' efforts to enhance the capabilities of farmers, stating, "_We are transforming what they are farming and their income by introducing higher value crops like sugar snaps and snow peas, and finding the market. So, we become vertically-integrated from day one in both the production and the distribution side of the business._" FarmWorks plans to expand operations to Kenya, expand presence to two more regions, and maintain 16 collection centers.
FarmWorks Addresses Challenges in Kenya's Agricultural Sector
Similar to Rwanda, agriculture plays a significant role in Kenya's economy. According to an agriculture sector survey commissioned by the Central Bank of Kenya, the sector accounts for 27% of the country's Gross Domestic Product (GDP), indirectly contributing to 27% of the GDP when linked with other sectors.
Furthermore, the agrarian sector is a major employer, providing jobs for 40% of the country's population. Particularly in rural areas, 70% of the demographic relies on the sector for their livelihood.
Kenya's agricultural sector faces challenges like lack of inputs, inadequate road networks, and limited knowledge on herbicide and pesticide use. FarmWorks addresses these issues by providing necessary farm inputs, ensuring a market for harvests, and conducting farmer training through training centers. This startup aims to optimize trade and improve Kenya's agricultural sector.
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