FarmWorks, a Kenyan agtech company that provides farmers with access to agricultural inputs and a market for their produce, has raised $4.1 million in a pre-Series A round, with Acumen Resilient Agriculture Fund serving as the round’s lead investor. FarmWorks raised a total of $5.6 million in equity funding from the Livelihood Impact Fund, Vested World, a variety of family offices, and angel investors.
Yi Li, the CEO of FarmWorks, who co-founded the company with Peter Muthee in 2020, told TechCrunch that the funding will be used to reinforce their data analytics capabilities, implement artificial intelligence to improve production and influence planting and lending decisions.
FarmWorks operates an out-grower program that unites over 2,000 smallholder farmers, allowing it to construct a supply chain network that assures the timely delivery of high-quality produce. In addition to the two counties in the country’s central region, where it is presently operational and has 16 collection centers, it intends to expand its network of contract farmers to other regions of Kenya.
The startup provides agricultural inputs and pest control services to farmers, as well as purchasing their produce for export or local sale. It also loans them agricultural equipment, such as drip irrigation systems.
“By introducing higher-value crops, such as sugar snaps and snow peas, and finding a market, we are transforming their agricultural practices and income. Therefore, we will be vertically integrated from day one in both production and distribution, as stated by Li.
According to this report, the startup is filling voids in Kenya’s agriculture sector, which accounts for 20% of the country’s Gross Domestic Product (GDP) and employs 70% of people in rural areas. Despite the fact that agriculture remains a vital sector of the Kenyan economy, small-scale farmers face a number of obstacles, such as a lack of high-quality farm inputs, information on good agricultural practices, insufficient advisory support, and unpredictable or unstable markets.
In addition to teaching farmers about sound agricultural practices, the startup demonstrates these techniques on its own test farms.
“We have a strong belief that the most significant problem facing farmers in Kenya is production; the low yield is primarily due to poor farming practices and soil degradation that has occurred over the years,” said Li, who added that the startup is unlocking production and enhancing farmers’ capacity. Each month, the venture sells approximately 400 tons of farm produce.
Previously, FarmWorks produced crops on its own properties, which are now used as training facilities.
“Running a large farm requires a lot of operational expenditures, and we realized that with the same amount of effort, we can reach a lot more producers. This year, we made the strategic decision to expand our out-grower program because it appeared to be gaining traction more quickly. “We will utilize our farms as training facilities,” said Li. Li previously worked in Kenya as a management consultant for McKinsey before co-founding FarmWorks with Muthee, who has nearly three decades of experience in the agriculture industry.