Releaf, an agritech startup disrupting Africa’s oil production industry, has secured pre-Series A funding of $3.3 million. The funding round, which the startup says was oversubscribed, will support the deployment of key technologies that could further boost the development and sophistication of Africa’s crude oil processing techniques, and possibly lead to much-needed increase in the production of vegetable oil in the continent.
When Ikenna Nzewi and Uzoma Ayogu, Nigerian-Americans, founded Releaf in 2017, they were on a mission to improve Africa’s food security while building a successful agritech company. This mission propelled them to Y Combinator, a global accelerator program that helps promising startups with advice on financing, networking, and business models. But after graduating from YC, Releaf’s business model was unclear to most, as its offerings ranged from an aggregator marketplace for agricultural products to trade finance solutions.
Eventually, the founders of the startup made it to Nigeria, their country of origin and the largest oil palm producer in Africa. Forced to find solutions to key problems in Nigeria’s food processing and agriculture sector, Nzewi and Ayogu toured 20 of Nigeria’s 36 states, looking for gaps that Releaf could fill with improved technology and practices. They finally found their golden spot: Nigeria’s suboptimized $3 billion oil palm industry, which was producing at a demand shortfall of around 60%
“We took a much broader approach to what the solution would be, but we really wanted to decide on a specific crop to work with. And we found that opportunity in the oil palm sector,” Nzewi told TechCrunch in an interview two years ago. behind.
More than four million smallholder farmers in Nigeria generate 80% of oil palm production in Nigeria’s fragmented market. These farmers mainly face two main problems: they are unable to transport their harvested produce to distant processing factories, and they lack modern equipment to efficiently process it themselves. This is where Releaf comes in, providing a chain of well-equipped processing factories that farmers can easily access. Releaf purchases the nuts from the farmers, uses its patented shelling technology, Kraken, to process the nuts with high efficiency (85% more than the industry standard), and then sells the processed oil to manufacturers and processors of consumer goods. massive consume.
Releaf turned heads in 2021 when it raised $4.2 million in its seed round: $2.7 million from investors and $1.5 million in grants. Nzewi then said the funds would be used to develop technology and roll out financing for small farmers in Nigeria. According to a statement sent to TechCabal, this new increase will support the release of two key technologies for Releaf: Kraken II and SITE..
Kraken II is a lower-cost, mobile version of Releaf’s Kraken. The company claims that the Kraken II works just as efficiently as its static predecessor, with the advantage that it is easy to transport to high-density growing areas. SITE, on the other hand, is a geospatial mapping application that decodes the most profitable positioning for farms and agricultural processing plants.
SITE was developed in collaboration with Stanford University Professor David Lobell, MacArthur Fellow and Director of the Center for Food Safety and the Environment, whose team refined the age identification process for oil palms in Nigeria. Releaf believes that the combination of Kraken II and SITE will enable it, and other connecting startups, to seize optimal opportunities in Nigeria’s oil palm belt rather than just sourcing crops within 100 kilometers of a fixed processing site. .
“PLACE and Kraken II are the next steps in our plan to fundamentally transform the efficiency of agricultural supply chains in Africa and we are excited to have partnered with an exceptional cohort of investors and collaborators to implement these technologies. For food supply chains to be profitable, we must maximize extraction yields with leading processing technology and minimize logistics costs by moving processing capacity closer to farmers,” Ayogu, Releaf co-founder, said in the statement.
“Before Releaf, stakeholders had to choose between one or the other. The big factories had great technology but were far away, leaving most farmers with rudimentary technology to process their crops. Now we can maximize both,” he added.
The $3.3 million funding round was led by investor Samurai Incubate Africa, with participation from Consonance Investment Managers, Stephen Pagliuca (Chairman of Bain Capital) and Jeff Ubben (World Wildlife Fund board member and founder of Inclusive Capital Partners).
Rena Yoneyama, Managing Partner of Samurai Incubate Africa, expressed her enthusiasm to continue investing in Releaf’s ambitious plans, while remaining positive on the market success of Kraken II and SITE.
“Releaf’s success with their pilot Kraken validates their thesis, and we are excited to continue supporting their ambitious vision to create efficient supply chains within the African agricultural market. They have added key members to their management team and continue to impress us with their rapid business growth and technological development. We look forward to more of the same success as the team releases Kraken II and PLACE.”
Stanford University Professor David Lobell contributed: “I enjoyed working with Releaf and using our tree height algorithm to correlate age with oil palm height to help farmers better understand their yields. futures and make better data-driven decisions about sustainability. replant There is a huge opportunity to unlock Africa’s unique agricultural potential by leveraging remote sensing solutions, and I believe this partnership will be a catalyst.”
Africa will represent 40% of the human population at the end of the 21st century, and the mass consumer goods market will emerge as one of its relevant industries worldwide. Releaf is positioning itself as a catalyst for this industrialization while ensuring inclusive success for agricultural stakeholders across the continent.