Shortage of agricultural inputs such as fertilizers, unpredictable prices and proliferation of substandard products in the markets are some of the biggest challenges for Kenya’s agricultural sector. This impact is particularly felt in the country, as agriculture accounts for 23% of its gross domestic product (GDP), making it the single largest contributor to its economy and its largest employer – agriculture employs nearly 40% of the country’s population and 70% of its rural people.
It is therefore certain that difficulties in accessing the necessary resources for sustainable production threaten not only food security, but also family income and livelihoods. To bridge the input access gap, iProcure, a B2B agtech, has been connecting agricultural producers and distributors with local retailers (agri-dealers) since 2014 through its unique distribution infrastructure that connects agricultural supply chains.
Iprocure told TechCrunch that it is now on track to increase its presence in Kenya and Uganda, which are its current markets, and enter Tanzania after securing $10.2 million in Series B funding. The latest round includes debt of 1, $2 million and was led by Investisseurs & Partenaires (I&P) and brings the total funding raised by iProcure to date to $17.2 million. Novastar Ventures, Ceniarth and British International Investment (BII), which recently took part in Apollo Agriculture’s $40 million Series B fundraising, also participated in the round.
“We have built a pan-African distribution infrastructure and are using these funds to expand our operations in our two markets and enter Tanzania. We will also allocate some of the resources to introduce higher quality and lower cost products that we source from international players,” said iProcure’s co-founder and chief data and growth officer, Stefano Carcoforo – also the former CEO, who was subsequently replaced by ex-Novastar partner Neeraj Waria.
Iprocure currently connects 5,000 agri-retailers with various manufacturers, but this number will grow as it includes more partners and retailers in the three markets and as it doubles its distribution centers to 20, increasing its delivery to the last mile.
Agri-traders are the focal point for suppliers hoping to introduce new products to Kenya’s commodity markets, as millions of farmers trust them as a source of sound agricultural advice. They are also well distributed across the country giving them a wide coverage of farming communities. Through agro-dealers, iProcure aims to double its reach to 2 million farmers in the next one year.
Agtech provides agribusinesses with a complete enterprise resource planning (ERP) system that works from mobile devices, helping them manage their supply and distribution.
This technology has introduced new efficiencies that control the entry of substandard supplies, as retailers can source directly from certified manufacturers and distributors. By helping to manage stockouts, agtech ultimately helps stabilize product prices to the benefit of both sellers and end users.
“Agribusinesses use our technology to track their sales, process sales, manage inventory, place orders and build CRMs that can help implement farmer loyalty programs. It does whatever it takes. We provide a fully transparent system from the factory to the time the farmer buys the product,” Carcoforo said.
For added reach, iProcure plans to provide zero-interest credit to agricultural traders, increasing their ability to purchase the hardware needed to run its ERP system. By bringing more retailers onto its system, iProcure will further gain access to the data needed to inform its growth strategy, including the buy-now-pay-later (BNPL) service currently in development.
“Working capital is an issue these retailers are facing and we have demonstrated that if we deliver on the BNPL model, retailers buy 30% more. This shows that the retailers themselves are limited in numbers and cannot buy all the inventory they can sell; meaning farmers cannot access all the raw materials they need. The BNPL service we are introducing will solve this problem,” Varia said.
According to Varia, iProcure has grown 16x over the past four years, doubling revenue every year except 2020 due to Covid. In the short term, it expects further expansion by bringing in more retailers and rolling out the BNPL offering.