The Acumen Resilient Agriculture Fund (ARAF), a first-of-its-kind equity fund that supports African agri-businesses that assist smallholder farmers adapt to climate change, has raised $58 million. The fund is supported by the Dutch entrepreneurial development bank (FMO), the Soros Economic Development Fund, the French development institution PROPARCO (through FISEA+, the AFD Fund advised by PROPARCO), the Children’s Investment Fund Foundation, IKEA Foundation, Global Social Impact, and other respected investors and funders. It is sponsored by Acumen and anchored by Green Climate Fund (GCF).
“Smallholder farmers feed the world, but they are among the most affected by the climate crisis,” said ARAF’s Managing Director Tamer El-Raghy. “ARAF’s impressive $58 million close, $8 million above our initial target for the fund, is a watershed moment and, with only 5% of climate investment directed toward adaptation, signals the beginning of a shift in climate finance. By investing in agri-startups in East and West Africa, ARAF can reduce poverty, build climate resilience, and demonstrate the impact of investing in resilient agriculture. Since we started deploying capital in 2020, our team has invested in five companies operating in Kenya, Uganda, and Nigeria.”
Here Is What You Need To Know
- The fund is managed by Acumen Capital Partners, a wholly owned subsidiary of Acumen.
- ARAF aims to create an ecosystem that allows smallholder farmers to boost their incomes and resilience by supporting agribusinesses that provide aggregation, digital platforms, and financial solutions.
“The Green Climate Fund is delighted to partner with Acumen to support innovative agribusinesses that enhance the climate resilience of smallholder farmers in Africa. GCF has supported the Acumen Resilient Agriculture Fund from the early concept phase and provided catalytic capital to unlock private investment into this first climate adaptationfocused agribusiness investment fund in Africa. The fund will make critical investments to support climate resilience and agriculture productivity for smallholder farmers across countries in East and West Africa and help shift the pattern of investment in climate change adaptation in Africa from grants to a long-term capital approach,” said Director of GCF’s Private Sector Facility Tony Clamp.
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“We are pleased to support ARAF as a lead investor. As a very reputable investor with an impressive track record in impact investing, Acumen’s focus on investing in promising early-stage companies active in smallholder value chains across East and West Africa aligns perfectly with FMO’s strategy. More importantly, by also being the first climate adaptation-focused agribusiness fund for African smallholders, the fund meets both our Green and Reducing Inequalities labels,” said Pieternel Boogaard, director of agribusiness, food, and water at FMO.
“The Soros Economic Development Fund is thrilled to support ARAF as a lead investor and help improve the climate resilience of smallholder farmers across sub-Saharan Africa. We believe ARAF can foster change by helping to seed, expand, or scale business models and restructure their relationship with powerful economic actors to empower smallholder farmers to improve their livelihoods and thrive. While initiated before COVID-19, this investment speaks to the moment by supporting vulnerable communities that are already disproportionally at risk,” said Catherine Cax, director of investments at the Soros Economic Development Fund.
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Acumen drew on its 20-year track record of helping early-stage social entrepreneurs, as well as its experience developing the off-grid energy industry through individual investments and commercial funds, to create ARAF. Acumen is applying the same concept to resilient agriculture through ARAF, providing catalytic investment to help agribusinesses bridge funding gaps on their way to scale.
Acumen has participated in the recent $5m Series A fundin ground raised by Sierra Leone’s Easy Solar. It also participated in Nigeria’s Tomato Jos, Ghana-based cleantech startup PEG Africa, among others.
For more information on how the impact investor invests, click here.
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Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer