14 May West Africa home to two of three top agri-tech ecosystems
The African agri-tech space is booming, with the number of start-ups operating in the market growing 110% over the past two years, and over US$19 million invested into the sector in that period.
This is according to the Agrinnovating for Africa: Exploring the African Agri-Tech Startup Ecosystem Report 2018, released by Disrupt Africa, which recorded 82 agri-tech start-ups in operation across Africa by the start of 2018, with 52% of these ventures launched in the past two years.
The report tracks annual start-up activity in the agri-tech space as early as 2010, but finds this activity remained limited until the end of 2015.
The current boom began in 2016, and over the following two years 43 new ventures launched across Africa.
According to the research while Kenya was the early pioneer of the African agri-tech sector, accelerating interest in West Africa over the past two years means this region now dominates the market; and is home to two of the top three agri-tech ecosystems on the continent.
Currently, Kenya and Nigeria tie in first place as the top two agri-tech markets on the continent; while Ghana places third. Together, these three countries account for over 60% of agri-tech start-ups active in Africa.
In early May the government of Ethiopia announced a partnership with Hong-Kong based and blockchain focused company Input Output Hong Kong (IOHK) to utilise a blockchain application platform to enhance the efficiency of the African country’s coffee production and supply chain management.
Recently Vox Telecom rolled out a suite of IOT solutions specifically targeted at Africa’s agricultural community.
Jacques du Toit, CEO of Vox Telecom said the company has hosted a series of direct engagements with the market and is pleased with the level of response by potential investors.
He said, “Farmers don’t understand and I don’t think they want to understand IOT. We are actually redoing our collateral to take out the word. Listen, they are not technology adverse – but they don’t understand IOT, so we’ve got to deliver this message in a different way. The second lesson was about practical implications. (The) mindset was that it is expensive and so we could only ever manage to track a very valuable asset. Now it is cheap, so we have to get the mindset changed to understand that one can track a chair, a briefcase or anything that I want to…”
The Disrupt Africa report adds that over the course of this period, over US$19 million has been invested into African agri-tech startups; with annual fundraising figures growing rapidly.
The amount of funding raised in 2017 grew by over 121% on the total for 2016.
“Behind the scenes, there has been formidable acceleration in the agri-tech market recently, and it is one of the most interesting spaces to watch in Africa today,” said Gabriella Mulligan, co-founder of Disrupt Africa.
“Everyone knows how important the agricultural sector is across Africa, but until very recently it remained relatively untouched by tech innovators. That is suddenly changing as entrepreneurs and investors realise the scale of the challenges facing farmers, and spot opportunities to reach huge addressable markets,” said Tom Jackson, Disrupt Africa co-founder.
Start-ups are particularly involved in applying e-commerce to the agriculture industry, with this type of agri-focused e-commerce platform accounting for 32.9% of start-ups. Information and knowledge sharing platforms are also popular; while a substantial number of entrepreneurs are focused on delivering FinTech solutions for farmers.
A total of six sub-sectors are examined in the report.
Source: IT Web Africa