FarmWorks, an agtech startup based in Kenya, secured $4.1 million in a pre-Series A funding round. The investment was led by Acumen Resilient Agriculture Fund, an existing investor in the company. Additionally, Livelihood Impact Fund, Vested World, various family offices, and angel investors also participated in the funding round. With this latest investment, FarmWorks has raised a total of $5.6 million in equity funding.
The primary purpose of this investment is to bolster FarmWorks’ data analytics capabilities and leverage artificial intelligence (AI) to enhance agricultural production and optimize planting and lending decisions. The company’s CEO, Yi Li, who co-founded the startup with Peter Muthee in 2020, revealed that the funds would be used to further develop their technological infrastructure and better support farmers in their network.
The company’s expansion plans include growing its network of contract farmers beyond its current operations in two counties within the central region of Kenya. Currently, FarmWorks boasts 16 collection centers in these areas.
Why the Investors Invested
The investment in FarmWorks can be attributed to several compelling reasons. The company’s innovative approach to agtech addresses significant gaps in Kenya’s agriculture sector. Agriculture plays a vital role in the Kenyan economy, contributing 20% of the country’s Gross Domestic Product (GDP) and employing 70% of people in rural areas. However, small-scale farmers, who form the majority, encounter various challenges such as limited access to quality farm inputs, inadequate advisory support, and unpredictable markets.
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FarmWorks’ out-grower scheme, which brings together thousands of smallholder farmers and ensures timely delivery of quality produce, stands as a practical solution to the challenges faced by these farmers. The company’s emphasis on data analytics and AI-driven solutions showcases its commitment to tackling the issue of low yields caused by poor farming practices and soil degradation over the years.
Furthermore, FarmWorks’ successful track record in selling approximately 400 tons of farm produce per month indicates the viability and growth potential of their business model. The investment by Acumen Resilient Agriculture Fund, Livelihood Impact Fund, Vested World, family offices, and angel investors reflects their confidence in the company’s ability to make a positive impact on the Kenyan agriculture sector while also generating returns on their investments.
A Look at FarmWorks
FarmWorks was founded in 2020 by Yi Li and Peter Muthee, with a vision to empower smallholder farmers in Kenya’s agriculture sector. The startup operates as an agtech platform, providing farmers with access to essential farm inputs and services while creating a market for their produce.
The company’s core model revolves around an out-grower scheme, bringing together over 2,000 smallholder farmers. This approach has enabled FarmWorks to build a robust supply chain network, ensuring the timely delivery of high-quality produce. As part of its expansion plans, the company intends to grow its network of contract farmers to additional regions within Kenya, beyond the two counties in the central region where it is currently operational.
FarmWorks’ services extend beyond providing inputs and purchasing produce. The startup offers pest control services and loans farming equipment, such as drip irrigation kits, to support farmers in enhancing their agricultural practices. By introducing higher-value crops like sugar snaps and snow peas and establishing viable markets, FarmWorks aims to create a vertically integrated system that improves both production and distribution in the agricultural value chain.
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Yi Li, the CEO of FarmWorks, previously worked as a management consultant for McKinsey in Kenya before venturing into the agtech space with co-founder Peter Muthee, who possesses nearly three decades of experience in agriculture.
Through its commitment to data analytics and AI-driven solutions, FarmWorks seeks to transform the agricultural landscape in Kenya, unlocking production potential and increasing farmers’ capacity. The company’s previous engagement in crop production on its farms has now transitioned into training centers, enabling them to focus on scaling their out-grower scheme and reach a broader community of farmers with impactful knowledge and support.
FarmWorks’ mission to uplift smallholder farmers in Kenya aligns with the critical needs of the agriculture sector, making it an attractive investment opportunity for Acumen Resilient Agriculture Fund, Livelihood Impact Fund, Vested World, family offices, and angel investors. Their investment not only supports the company’s growth but also contributes to the advancement of sustainable agriculture practices and rural livelihoods in Kenya.
FarmWorks fund FarmWorks fund
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard