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Editor’s note: Niall is the co-founder of Graze, an Agri Fintech studio dedicated to the development of digital financial services for the agri-food sector. He started writing the Agri Fintech newsletter in 2021 to highlight innovative projects globally and share the stories of the founders. Previously, Haughey was a consultant to the financial services industry in London, set up and ran a payments business in the UK and Ireland, and worked across Africa developing agricultural finance products for inputs, grain warehouse receipts and equipment.

Haughey recently released a new report that revealed $1.6 billion in investment in agri-fintech startups in 2021 across 93 deals, representing 138% year-over-year growth in the industry. transaction activity. Here he explores two other trends emerging from the research.


My last report Agri Fintech in numbers highlighted two notable trends for me.

Investment in Europe by transaction activity and dollars seems quite low, especially considering the total amount invested in fintech in the region. And, directly to the south, investment in African agricultural fintech models has become feverish, with a belated recognition that agriculture, technology and finance all play a mutually beneficial role in solving some of the market challenges.

Agri Fintech in Numbers Report Chart

European investment is low, is this an opportunity?

European Agri Fintech raised $124 million in 2021, just 8% of total funds raised in the data collected. That number actually drops when you take out Wefarm ($11m) and Pula ($6m) which operate in sub-Saharan Africa but are domiciled in the UK and Switzerland respectively. However, European fintech as a whole has raised aabout 30 billion dollars, or 23% of the global total of $131 billion. Is it possible that agri fintech in Europe is not a “thing”?

First, let’s take a look at where general fintech investment has gone in Europe. Neobanks have been popular recipients of funds with N26 ($900m), Monzo ($500m) and Revolut ($800m) raising astronomical amounts of investment. Klarna raised $1.6 billion over two rounds, to fuel its Buy Now Pay Later (BNPL) proposition, which was another popular theme.

I don’t expect a similar increase in investment in neo-agricultural banks, but Oxbury Bank is an example in the food and agribusiness sector that raised $21m in 2021, offering a banking model in UK markets and a proposition technology in others – it’s very neo-banking. Tarfin, which can be classified as a neo-lender, also raised an $8m Series A to expand its credit footprint, with a recent expansion into Romania, one of the countries with the largest funding gap in the world. agricultural financing, according to Fi-Compass, a European research platform.

As for BNPL, Agro.Club has adopted an opportunistic approach by already launching financial products in several markets including the United States, Spain and currently has an appetite to launch in Brazil, according to this APN article. I think the agricultural version of ‘BNPL’ will be ‘Buy Now Pay Seasonally’, with changed repayment terms beyond the typical three to four months offered by Klarna, for example, so that will be interesting to watch.

Prioritization versus underperformance

There were a few bright lights. HeavyFinance looks like a true fintech-focused company that senses an opportunity for equipment financing across Europe. It gladly seizes the opportunity of 12.5 billion euros cited by Fi-Compass to fill the financing needs and actively launched in markets such as Poland or Portugal where the financial gaps are important. HeavyFinance’s management team is on the right track and does not rule out entering markets like Germany or France if the right opportunities arise.

Similarly, companies such as Stable and Concept Dairy in Europe offer opportunities for bespoke risk management products. Personally, the innovation captured in these types of deals is more important than raising huge rounds – although Stable did that too, raising a credible Series A of $46.5 million and a Series B of 60. million dollars more recently!

An African boom

African investment has had a boom period. There were 16 deals in 2021, as many as in Europe, with total funds raised rising from $10 million to $75 million. This year refused to slow down with Apollo Agriculture also raising a bumper $40 million Series B round in March.

This flurry of activity is welcome for two reasons. First, the emergence of these Agritech platforms has highlighted the opportunities for investors who want to address value chain issues in Sub-Saharan markets. Second, it changes the scenario of donor-linked investment which has been the only willing investor in this sector for too long.

But what about African outliers?

In 2021 and recently in 2022, two major rounds were closed by Twiga Foods and Apollo Agriculture. Will these set the standard for venture capital rounds on the continent?. I think there’s still a lot of work to be done to substantiate these numbers, but that’s not to criticize either company, which, of course, already knows that.

First, ignoring valuation, funds raised are on par with other companies such as ProducePay ($43 million) or Bushel in the US ($47 million). ProducePay targets the fresh produce market – it has “800 customers and has financed the production of over $3 billion worth of fresh produce”. It’s a huge market and it’s already raised $200 million in institutional debt for the funding lines. Similarly, Bushel has a product in the gigantic North American grain market and aims to build financial functionality around it.

Twiga has raised funds to move upstream to integrated production, announcing last week a $10 million investment, including equity and debt, in commercial farming. This reminds operators and investors that working with small producers is very difficult to scale up. Twiga also wants to expand into five other markets such as Nigeria and Ghana, to expand its B2B offering and perhaps commercial farming is a way to secure supply in a platform market that is becoming competitive.

Apollo Agriculture is a separate example. It has a tightly integrated platform that works with input retailers to extend credit to growers and has cited commodity finance as the key to achieving 10x sales growth. Its offering is more unique and it will be interesting to note its expansion plans when they are disclosed – will they be across Africa or will they venture further afield?

Both examples are classic examples of the agritech style of integrated finance: markets, loans, intelligence, all rolled into one. I hope the ecosystem will secure more investment in market pull platforms offered by Vendease (targeted at restaurants) or AFEX, which targets processors, as well as in transactional infrastructure such as Nile.ag which streamlines paperwork.

Incidentally, this is also where fintech investment on the continent has gone – infrastructure – with, it seems, more than $3 billion in venture capital investment in construction the rails for future commerce around payments, cross-border remittances and lending solutions.

In short; developed countries are looking for niches and working around existing infrastructure and value chains. While in the developing world, everything remains to be played.