Home Entrepreneurship Nigerian Agritech startup Releaf secures $4.2m funding to scale its services

Nigerian Agritech startup Releaf secures $4.2m funding to scale its services

by Radarr Africa
Nigerian Agritech startup Releaf secures $4.2m funding to scale its services

Nigerian agritech startup, which specializes in proprietary hardware and software solutions to drive the industrialisation of food processing in Africa, has raised US$4.2 million in seed equity and grant funding to support the development and scaling of technology solutions for the oil palm sector.

The funding round was led by Samurai Incubate Africa, Future Africa and Consonance Investment Managers. They were supported by angel investors like the chairman of Bain Capital, Stephen Pagliuca, and Justin Kan of Twitch.

The grants were obtained from The Challenge Fund for Youth Employment (CFYE) and the United States Agency for International Development (USAID)

Releaf took part in the Y Combinator programme in the same year, and only started operations in the oil palm space in 2019 and deployed its proprietary technology in January of this year.

Founded in 2017, by Ikenna Nzewi and Uzoma Ayogu, Releaf focuses on value chains where smaller factories are set up near smallholder farmers. This allows them to get better processing yields and fewer logistics costs; in the end, the farmer has more money to work with.

According to Nzewi who said that the oil palm market in Nigeria is a $3 billion one with over 4 million smallholder farmers cultivating farms where those crops are planted.

“We took a much more broad approach to what the solution would be, but we wanted to decide on a specific crop to work in. And we found that opportunity in the oil palm sector,” 

These farmers drive 80% of the production of oil palm. But since the industry is quite fragmented, they have many challenges processing the oil palm because it’s a crop that requires serious processing power to extract vegetable oil from it.

Farmers typically go through this process by using rocks or inappropriate hardware ineffective processes that lead to low-quality oil palm largely unfit as input for high-quality vegetable oil manufacturing.

Nzewi says the team saw an opportunity and set out to build a technology to help farmers crack oil palm nuts. The result was Kraken, a proprietary patent-pending machine.

Agritech startups have experienced a lull in securing investments lately so this is a big win for the team. Now, they hope to expand into new areas because according to the CEO, the startup has more appetite for moving into new geographies instead of crop offerings. According to him, the style of cultivating and processing oil palm is straightforward due to its similarities across West Africa.

Speaking on the investment, General Partner at Future Africa, Iyin Aboyeji, said “the team at Releaf is building the agro-allied industry of the future from the ground up, starting with palm oil which they have developed a novel technology to aggregate, deshell and process into critical ingredients like vegetable oil and glycerine. Future Africa is delighted to back Releaf to build the future of modern agriculture.”

You may also like

Leave a Comment