UK-based Nigerians are investing in Nigeria’s booming agricultural sector from the comfort of their homes, thanks to one and half year-old, VC-backed agritech platform, Farmcrowdy.
The company, launched in Nigeria in 2016, currently boasts of 10,000 acres and 7,000 signed up farmers across 9 states, in Africa’s most populous country. To-date, the platform has amassed an active sponsor base totalling over 1,000 sponsors, and total investments in excess of £1,620,000 with a growing number of sponsors located in the UK, thanks to the Diaspora’s strong connections to Nigeria.
Britain is the 4th largest source of remittance in the world with Nigeria receiving approximately £4 billion in remittances annually.
Onyeka Akumah, CEO and Co-Founder says,
“With the current climate of economic uncertainty surrounding the UK with the likes of Brexit for example, we feel it is important that options and alternative means of investment are made available. The UK is home to over 1 million Nigerians, and with a multi-million pound remittance market, Nigerians living in the Diaspora have the option to not only send money home to their families for their upkeep, but also build their personal investment portfolios through investing in one of the country’s largest sectors.”
Farmcrowdy is reshaping the way in which people participate in farming and food production through using their online and mobile platforms, and predicts that hundreds more Nigerians based in the UK will look to invest their money into the country’s estimated £30bn agricultural sector, thanks to the strong returns on investment, and the fact that technology is now breaking down barriers to investment and engagement.
Whereas, previously deploying funds to invest into Nigerian farming opportunities may have been problematic with investors unable to track progress of crops or guarantee payments would be made, Farmcrowdy provides a safe, trusted platform where farmers and sponsors can interact, via mobile.
According to Tope Omotolani, VP Operations and Co-Founder, “Our platform makes it easy for Nigerians in the Diaspora to use their funds to directly impact smallholder farmers who are in dire need of this kind of capital intervention to expand and optimize their farming activities. This in turn gives the sponsors an opportunity to empower farmers and make healthy returns at the end of the farm cycle. Rural farmers contribute the largest amount of food crops that are grown in Nigeria’s economy, yet they have the least amount of resources to cultivate important food crops. In order to increase food production in Nigeria, we have set a goal to work with 50,000 farmers by the year 2020. This is no small goal by any means but we also understand that the impact these would create in the lives of the farmers, their community and in the country as a whole would be remarkable.”
With sponsorship starting from N90,000 (£175), Farmcrowdy connects small scale farmers with sponsors, who invest in crop cycles. A crop cycle can be anything from poultry [3-5 months] to cassava [9 months]. The farmers receive on-the-ground advice from farm specialists – training in better agriculture practices, different type of crops and production methods. When the yield is sold at harvest, the sponsor receives their original investment + 40% of the profit, the farmer receives 40% of the profit and Farmcrowdy receives 20% of the profit. Farm Sponsors can get between 6-15% on their returns.
While this farm process is ongoing, the Farm Sponsors are able to keep track of the full cycle through Farmcrowdy’s mobile app which has marked 60,000 unique downloads to date, and by receiving regular updates in text, pictures and videos.
Oyawale Olusola, VP Investment and Corporate Governance of Farmcrowdy says “The scale of the Nigerian agricultural sector is huge; there are currently around 38 million small scale farmers who are unbankable; our mission is to connect them with Sponsors who are interested in farming, and who want to invest in the market. Nigerians understand how dominant the agricultural market is in the country, but there hasn’t been a reliable route to market, in terms of sourcing farmers and making/receiving payments. This is the challenge Farmcrowdy set out to conquer, and we’ve recorded some super strong interest already, not only from Sponsors in Nigeria, but also from the Diaspora, which is why we’ve come to the UK this week, to grow our user base here.
“Nigerians in the Diaspora have strong ties to relatives back home, and have the desire to influence economic and social change; they also understand the sheer scale of Nigeria’s agricultural sector. Through Farmcrowdy, we want to facilitate narratives that focus on the ability to effect this change, as well as generate revenues both for our farmers, as well as our sponsors. Farmcrowdy is a platform through which engaging and collaborating with Nigerians in the UK, we can collectively help build and contribute to the Nigerian agricultural sector and boost national food security”.
The multi-award winning startup recently raised £700,000 as equity investment to grow it’s operations in 2017. In early 2018, it also announced that it was a recipient of a £250,000 grant from dedicated GSMA global team Mobile for Development as part of the GSMA Ecosystem Accelerator Innovation Fund which was awarded at the Mobile World Congress 2018 in Barcelona, Spain.