Small African farmers are facing a multitude of problems that affect the progress of agricultural production on the continent. But software-for-agriculture startup Khula has an innovative solution that’s helping this niche industry thrive again.
TechCrunch reports that the South African-based company just announced the raise of a $1.3 million seed round to help further scale its farming software and expand nationwide. The round, which closed last year, was led by AECI — one of Africa’s biggest agrochemical companies — and included participation from South African impact investor E Squared Investments.
With financial-backing from its lead investor, Khula now has access to AECI’s wide distribution network which is poised to help the platform scale its inputs app. AECI’s support will go a long way as a long-term partner that’s genuinely interested in the execution of the platform’s services.
“Khula has very attractive fundamentals, a sizable addressable market, app development capabilities, key agri-business networks and a management team that wishes to work with AECI as their preferred agri-input and technical advisory partner,” Quintin Cross — managing director of AECI Plant Health — said in a statement.
Khula was launched back in 2018 by co-founders Karidas Tshintsholo, Matthew Piper and Jackson Dyora with the intention of offering small and commercial-size African farmers the technology they needed to grow their businesses. In starting their business, they were also able to identify other issues on the continent. Although Africa is made up of 60 percent arable land, the co-founders wondered if it had considerably less agricultural produce than other places in the world.
“It didn’t make sense that we have more land than any other continent,” Tshintsholo told TechCrunch. “And pretty much everyone on the continent is a farmer and we’re buying food more than we were selling. We wondered how that was possible, considering how big of competitive advantage agriculture is?”
All three co-founders wanted to make an influential and meaningful impact on the continent so developing supportive agricultural technology was their way of making a difference on behalf of African farmers.
Through Khula, the platform has created an ecosystem made up of three key parts that give these farmers access, liquidity and a market. According to TechCrunch this ecosystem includes an Inputs App — which grants farmers access to approved agricultural inputs and services from local and international suppliers; a Fresh Produce Marketplace — which allows farmers to sell produce directly to local and international formal bulk buyers; and the Funder Dashboard — which connects institutional investors with farmers who meet their funding requirements.
“The reason we’ve gone with this ecosystem approach is that it’s more of a sticky business model,” Tshintsholo shared with the outlet. “So we want to allow farmers to use our ecosystem to buy the products they need and get the services they need.”
In its three years of operation, Khula has seen considerable growth with more than 3,000 farmers using its platform and over 100 suppliers now working with the startup company. Now its plan of action is to continue growing in South Africa and eventually beyond to create real change in Africa’s agriculture industry.