Nigeria’s Food Processing Startup Releaf Secures $4.2M From Seed And Grants
The Nigerian agritech startup has just announced that it raised $4.2million through a seed round and a series of grants to scale its business across the country.
The pair then went on to build Kraken, a proprietary patent-pending machine.
But how does it actually work?
Releaf buys nuts from farmers, then uses the Kraken to crack the nuts and crush the kernels into vegetable oil. The firm then sells the vegetable oil to fast-moving consumer goods processors and local manufacturers, mainly in Nigeria’s south-southern region.
“Nigeria has about 60% more demand for vegetable oil than it does supply. And it can not be met due to supply shortfall with imports because the government banned the importation of vegetable oil. So there is a need to take these smallholders who are driving 80% of production and make them more efficient so that we can have a better balance of supply and demand for vegetable oil,”Ikenna Nzewi in TechCrunch
According to the company, Kraken already processes 500 tonnes of palm nuts. In addition, its software connects to over 2,000 smallholder farmers who have supplied over 10 million kilograms of quality palm kernel nuts to food factories.
Iyin Aboyeji, a general partner at co-lead investor Future Africa told TechCrunch that the team at Releaf are building “the agro-allied industry of the future from the ground up.”
He added: “[They are] 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.”
The oil palm market in Nigeria is already a $3 billion one, with over 4 million smallholder farmers cultivating farms where those crops are planted.
According to a report conducted by PWC, these farmers reportedly drive 80% of the production of oil palm.
Who invested in the start-up?
It raised $2.7 million in seed and grants towards their work with pan-African focused venture capital firms Samurai Incubate Africa, Future Africa, and Consonance Investment Managers leading the round.
Individual investors like Stephen Pagliuca, the chairman of Bain Capital, and Justin Kan of Twitch also participated.
In addition to the seed round, the startup secured $1.5 million in grants from The Challenge Fund for Youth Employment (CFYE) and USAID.