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Spices Agro-export Startup, Agricorp Raises $17.5m Series A funding
Sunday Okobi
A Nigerian-based spices producing, processing, and exporting company, Agricorp International, has raised $17.5 million in Series A funding to increase its processing capacity to 7,000 metric tonnes, to become the largest spices export startup on the Africa continent.
The founder and Chief Executive Officer of the company, Kenneth Obiajulu, told THISDAY at a press conference that the fund was by Vami Nigeria, One Capital LLC, and AFEX. Nigerian-based Vami led the funding round with $11.5 million in equity, while the other investors provided working capital financing for the company. Ernst & Young (Nigeria) served as transaction advisers while Elisio Law Office and Pavestone Legal served as legal advisers.
Obiajulu, who founded the spices export startup with Wale Omotimirin, said Agricorp is contributing to meeting the growing demand of spices as an export material, adding that data from the Ministry of Agriculture shows that despite being the third highest exporter of ginger globally, Nigeria’s ginger production is put at 31 million metric tons (MT), while demand is put at 65 million MT, leaving a gap of 34 million MT.
According to him, “While Nigeria accounts for more than 16 percent of the global production of ginger; it gets less than 4 percent of the export market share.
“We believe that by increasing our capacity to 7,000MT, we will maximise the potentials to boost Nigeria’s forex earnings through export, contribute our quota to improving the Nigerian GDP from agriculture, and serve as a worthy model to African youths who aspire to be agribusiness owners. We want to show them it is possible and very rewarding as well.”
He added: “Agricorp International is enhancing spices production uses proprietary technology to aggregate spices (ginger, turmeric, garlic, chilli pepper, and sesame) from smallholder farmers in Nigeria, process them into various products, and export them to major buyers in the Middle East, Africa and Asia. In less than three years, the business has grown its revenue by over 585 percent to service global clients in the food processing and pharmaceutical industry.”
Lamenting the effect of insecurity in the agriculture sector, Obiajulu, however, disclosed that since its launch in Nigeria in November 2018, Agricorp has supported over 5,000 smallholder farmers mostly in Kaduna, their area of operation, with inputs and training on good agronomic practices, and has built a 0.5MT/hour spice processing plant in Kaduna, which produces value-added products for the export market.
“It has also used its proprietary technology, farmbase to register, aggregate, and pay farmers for produce sold. We work with farmers to cultivate our products in our small farms. From the processing end, and working in a very volatile area (Kaduna), security is our major challenge. But we have been able to coopt the community into our system, and we have managed to avoid any ugly incident because of such seamless integration.
“In a market where farmers are largely undocumented and unbanked, Agricorp collates data that can help provide detailed analysis for stakeholders (i.e. government, agribusiness, private companies and donor organisations among others) to make informed agricultural decisions.
“It also helps with traceability of all farmer activities from the need for farm input to disbursement to sales of produce and eventually, payment. Financial institutions can also use this information to provide loans, credit facilities, and insurance to interested parties,” he stated at a press conference.
He stated that logistics and the believability in Nigerian products outside the country are also some of the challenges faced by many exporting startup in the country, adding that it will take a bold approach to put Nigeria on the global export radar by leveraging investments to build simple processing systems for spices and other agro products.
“Agricorp aims to be that bold company standing at the forefront of enhancing global food systems. It is building processes to enhance global food systems; set to increase its production capacity to 7,000MT,” the CEO said.
In its remark, the lead investors, Vami Nigeria, said: “We led the round because we saw a clear growth path, strong social impact, excellent financial trajectory, and global collaborations with key partners. Most importantly, the depth of knowledge, passion, and resilience of the team is unrivalled.
Also, the Managing Director at AFEX, Samirah Ade-Adebiyi, in his statement on the partnership, said: “Our other businesses have transacted with Agricorp on several occasions and have seen the business grow over time. Now, we are committed to providing the working capital they require to scale their operations at any level.”
