- Releaf has raised $3.3 million in a pre-Series A round from Samurai Incubate Africa, Consonance Investment Managers, Stephen Pagliuca and Jeff Ubben.
- The startup creates technology that ensures FMCGs have access to high-quality ingredients for their factories and has focused on the Nigerian oil palm industry.
- Their products include krakena palm kernel sheller that processes 500 tons of palm kernel weekly and PLACEa geospatial mapping application that helps manufacturers determine the best locations to locate operating tools.
Nigerian agtech startup, Releaf, today announced the completion of a $3.3 million pre-Series A round led by Samurai Incubate Africa. Consonance’s investment managers, Stephen Pagliuca, president of Bain Capital, and Jeff Ubben, founder of Inclusive Capital Partners, also invested in what the startup describes as an oversubscribed round.
Releaf’s pre-Series A follows a seed round completed in 2021 led by Samurai Incubate Africa, while Consonance Investment Managers and Stephen Pagliuca also participated. At the time of its seed round, the startup, which develops technology for the oil palm industry, had completed development of a palm nut sheller: kraken – which, according to the startup’s CEO and co-founder, Ikenna Nzewi, could process 500 tons of palm kernel weekly with 95% accuracy.
Since then, the startup has improved the functionality of krakenreleasing a second portable version – Kraken II. In addition to having the same functions as its predecessor, it costs half as much. At the same time, its portability means that it can be transported to distant locations yielding up to 3 times profitability.
During a call with Techpoint AfricaUzoma Ayogu, CTO of the startup, explained that building Kraken II it was out of a desire to reduce the cost of CAPEX required to scale while reducing logistics costs.
“If you want the food value chain to work and deliver value to farmers, processors, consumer goods, and consumers, you have to figure out how to reduce logistics cost along this value chain by processing close to where it is. find these farmers. Our initial focus was to establish kraken II in opportune locations where we could reduce logistics costs by 60-80%, but then realized that this static approach would not give us the most flexibility or allow us to maximize profitability and deliver the most value to our farmers due to to seasonality, the changing pricing environment, and CAPEX cost at scale. So we decided to figure out how to do kraken portable, so it stays in a specific place for a specific period of time.
With the success of krakenReleaf has added a geospatial mapping application: PLACE – developed in collaboration with Professor David Lobell, Stanford University Professor, MacArthur Genius Scholar, and Director of the Center for Food Safety and the Environment.
PLACE uses geospatial mapping tools to determine how much oil palm is planted in an area and its annual yield. It also uses Releaf’s proprietary data on soil type, rainfall, farmer productivity, and third-party data from organizations such as the International Institute of Tropical Agriculture (IITA), the Foundation for Partnership Initiatives in the Niger Delta ( PIND) and the Rocky Mountain Institute (RMI). ) to improve business decisions, such as where to locate certain operations.
Rena Yoneyama is a managing partner at Samurai Incubate, a lead investor, and in a statement, she alluded to Releaf’s success with kraken as proof of the validity of the startup’s ideas.
“Releaf’s success with its pilot kraken validates his thesis, and we are excited to continue supporting his 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 rolls out. Kraken II Y PLACE.”
Kraken II and SITE are two solutions that ensure that players in the oil palm industry not only have the raw materials to keep their mills afloat, but are also close to the sources of the raw materials they need.
“PLACE Y Kraken II they 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. 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,” Ayogu added.
Given Kraken IIWith the capabilities and potential to reduce much of the operating costs manufacturers face, Releaf has naturally received sales inquiries. Still, Ayogu insists that producing for commercial purposes is not in the cards with the startup focused on building relationships with the farmers they work with.
“We have received a lot of demand from people who say that we want to buy kraken. At this time, we are not selling it to anyone and are using it internally. There may be a world where once we become a market leader on the supply side, we would consider franchising, but right now, we are focused on gaining dominance and market share through the use of kraken build lasting and strong relationships with the farmers we work with and be able to meet the demand of our FMCG customers.”
Since 2021, the startup has processed more than 10 million kilograms of palm nuts, while monthly revenue has grown 7 times year-over-year. He has also won contracts worth more than $100 million from major consumer goods manufacturers such as Presco and PZ Cussons.