A recent study by Disrupt Africa, a one-stop-shop for information pertaining to the continent’s tech startup and investment ecosystem indicates that Kenya tops in Africa in attracting Foreign Direct Investment and leads in talent expertise and product development in the last two years, indicating investors’ appetite for the key sector.
Foreign Direct Investment which is worth Sh1.3bn means a booming agri-tech space with the number of startups operating in the market growing by 110 per cent over the period under review, and over $19 million (Sh1.9bn) invested into the sector in the same period.
Though there was a decline in agro processing sector due to constrained domestic supply of agricultural raw materials, food subsector, notable growths were realised in the manufacture of grain mill products at 8.3 per cent, bakery products at 8.1 per cent and animal feeds at 8.6 per cent according to Kenya National Bureau of Statistics’ Economic survey 2018.
There is growing interest in funding for agri-tech startups that focus on the real problem of food security and enabling better use of technology to grow the agriculture sector as a whole. It is a welcome and attractive idea for investors, as per the experts.
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The Disrupt Africa report which followed up the performance of various agri-tech firms in Africa for the past few years found that by the beginning of this year 82 such firms were operating across the continent with more than half of the companies were launched in the last two years, indicating the sector is still in the nascent stage.
Kenya is in the leading position together with Nigeria and accounts for 23.2 per cent of all African agri-tech startups with 19 companies in the list as Ghana comes third.
According to Gabriella Mulligan, co-founder of Disrupt Africa, the scope for innovation in the agricultural sphere is big and a refreshed take could unlock huge value for the whole of Africa.
“Kenyan agri-tech startups have raised over $13.7 million (Sh1.3 billion) between 2015 and 2017 with e-commerce, agriculture-focused start-ups being the most popular sub-sector in the country, accounting for 36.8 per cent of the startups,” she said.
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Other areas that investors showed interest in were information and knowledge-sharing platforms, farm and supply chain management solutions.
According to Tom Jackson, Disrupt Africa co-founder, agricultural sector for a long time remained relatively untouched by tech innovators but this is suddenly changing with entrepreneurs and investors realising the scale of the challenges facing farmers, and spot opportunities.