The billionaire co-founder of Netflix Inc., Reed Hastings, and Eric Schmidt, the former chief executive officer of Alphabet Inc., have participated in a funding round for an African solar irrigation startup, SunCulture.
Alongside other investors like InfraCo Africa Ltd. and Acumen Fund Inc., the duo contributed $27 million to support SunCulture, headquartered in Nairobi, Kenya.
The startup’s primary endeavor involves providing small-scale farmers with solar-powered water pumps, subsidized through the sale of carbon credits.
This initiative allows farmers to replace diesel-powered pumps, thereby enhancing yields in previously non-irrigated fields. Operating in Kenya, Uganda, and Ivory Coast, SunCulture also has distribution agreements in Ethiopia, Zambia, and Togo.
Reed Hastings emphasized the significance of SunCulture’s mission, stating, “SunCulture helps farmers grow more food, which is exactly the kind of business that prospers.” The startup addresses a critical issue, as only 4% of the 700 million Africans living on small-holder farms have access to irrigation, resulting in lower yields and vulnerability to dry weather, Bloomberg first reported.
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What you should know
SunCulture’s approach involves selling solar-powered units that require minimal power consumption, using as little as 310 watts, comparable to the energy needed for five standard incandescent light bulbs.
Samir Ibrahim, SunCulture’s CEO, highlighted the company’s objective of making solar irrigation 50% cheaper than diesel and petrol pumps, thereby significantly reducing costs for farmers while enhancing productivity.
With the latest Series B funding round raising $65 million, SunCulture aims to secure a total of $219 million to install 274,000 systems in Kenya alone.
What we know
This funding, obtained through a combination of equity, debt, grants, and carbon financing, shows the solar startup’s commitment to expanding its reach and impact across Africa.
Furthermore, it plans to extend its operations continent-wide, with ongoing pilots in various countries. The company also aims to diversify its offerings by facilitating additional farming services such as soil tests and insurance.
Earlier investors in the startup include notable entities like EDF International SAS, DPI Energy Ventures Ltd., Equator Africa Fund, and Energy Access Ventures Fund.
The Series B funding round was advised by London-based EKTA Partners, signaling growing interest and support for SunCulture’s innovative approach to agricultural sustainability in Africa.
Backstory
Reed Hastings and Eric Schmidt have joined the ranks of high-net-worth individuals investing in African startups.
Notably, Microsoft billionaire Bill Gates and Amazon’s Jeff Bezos have previously invested in California-based mining unicorn KoBold, led by CEO Kurt House. KoBold which recently made copper discovery in Mingomba, northern Zambia, following a year of mining operations-achieved unicorn status last summer with a $1 billion valuation, attracting investments from prominent figures.
The company utilizes artificial intelligence to identify new deposits of critical minerals crucial for battery metal production, such as copper, lithium, nickel, and cobalt.
Additionally, Africa’s wealthiest individual, Aliko Dangote, alongside other US billionaires, teamed up to support a new $500 million fund focused on Africa.
