Absa Bank, in line with its strategic goal to become a digitally powered business committed to transformation, has recently acquired a minority stake in the agritech start-up Khula! App Pty Ltd. This move signifies Absa’s dedication to embracing digitization and improving efficiency and productivity in South Africa’s agricultural sector.
Khula! has developed an award-winning app that encompasses three platforms, addressing various challenges across the agricultural value chain. The Fresh Produce Marketplace connects small-scale farmers, commercial farmers, and fresh produce distributors with retail, wholesale, and export buyers. The Input Marketplace enables farmers to purchase products and services such as seeds, plant health, plant protection, and animal health products from leading industry suppliers. Additionally, the Funder Dashboard facilitates order completion, payment processing, and serves as a platform for farmers seeking funding to connect with potential investors.
Faisal Mkhize, Chief Executive for Relationship Banking at Absa Group, expresses enthusiasm about solidifying the relationship with Khula!, stating, “Amid efforts to continue building lasting relationships with our stakeholders, we are excited to further cement our relationship with Khula! As the biggest financier of agriculture in South Africa, this transaction underscores our commitment to digitization in a way that improves efficiency and productivity, which can go a long way in making South Africa more competitive.”
Karidas Tshintsholo, Chief Executive Officer at Khula!, acknowledges Absa’s significant role in agri-banking both in South Africa and on the continent. Tshintsholo views Absa’s addition to their capitalization table as a strategic and long-term decision that aligns their interests and visions for the industry’s transformation in the coming years.
This transaction represents the continuation of a strategic partnership that began in 2018 and has contributed to Khula!’s substantial growth. Since its initial pilot with approximately 400 farmers, the app has attracted over 7,000 active users and offers more than 5,000 products through its Input Marketplace. Throughout this journey, Absa and Khula! have collaborated to introduce a standardized payment gateway that facilitates transactions on the app. Absa has also provided support to Khula! through Enterprise Development Funding and has closely worked with its leadership since the company’s inception.
Kglalaletso Tlhoaele, Head of Absa Enterprise Development, emphasizes their commitment to seeking opportunities that positively impact South Africa and society as a whole. The meeting with Khula!’s founding members left a lasting impression on Absa, as they were impressed by their ideas, energy, and dedication to making Khula! a success. This made it easy for Absa to buy into Khula!’s vision and support them from an Enterprise Development perspective. Tlhoaele expresses pride in the progress and growth of the business.
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Abrie Rautenbach, Head of Absa AgriBusiness, believes that this acquisition will not only strengthen Absa’s agriculture offerings for Small and Medium Enterprises (SMEs), but also provide an opportunity to further assist in the expansion of Khula!’s proposition, potentially extending its reach to other African markets where the bank operates.
In recognition of its innovation and excellence, Khula! was honored with the MTN App of the Year award in 2018 and emerged as the winner of the KPMG Private Enterprise Tech Innovator in Africa competition in 2021.
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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