Nigeria’s efforts to get the private sector drive its agricultural revolution dream is achieving results with investors heightening interests in numerous agro based firms in the country. This was given wings with the just concluded Series A round of  €3.9 million funding raised by Tomato Jos, an agricultural company based in Kaduna, north-central Nigeria. The funding which will be deployed into the processing and distribution of tomato products is expected to give the company the much needed elbow room to grow products all year round irrespective of climatic conditions. Tomato Jos is presently working with smallholder farmers to increase yield, reduce losses after harvest, and get optimum returns from sales to customers.

Founded in 2014, the company says it has directly supported over 70 farmers in growing their average yield by over 340% from 5 to 22 metric tons per hectare, while increasing average income 455%. One area the company wants to increase leverage is in stemming high loss due to poor storage facilities and other external factors. This is because Nigeria loses 40% of its post-harvest tomato stock annually, according to the Raw Materials Research and Development Council last year. While the volume of production has increased to 1.8 metric tons, it does not match the demand for tomatoes which is estimated at 2.4 metric tons per annum. Poor infrastructural support for the agric sector jeopardizes the work of farmers who own small-scale farms and often lack the means to secure their produce.

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Tomato Jos hitherto focused on efficient production of tomatoes and paste, solving the problems of wastage in the value chain. With the funding, they will work on installing a drip irrigation system and a tomato processing plant that can produce 24 tons of finished product per day. “Processing has always been the plan for Tomato Jos, but to get there, we spent a long five years working only on farming and primary production to make sure that we had a really solid foundation in place,” says Mira Mehta, founder and CEO of Tomato Jos. Mehta, a Finnish-Indian and American, first visited Nigeria in 2008 and identified a gap in the tomato value chain within her first year working for an international non-profit. The business took off in 2014 after a Zimbabwean who owned a feed mill in Nasarawa, another state bordering Abuja, offered her some land to farm on for free.

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Five years later, Tomato Jos has become a 500-hectare-enterprise with plans to work with thousands of small-scale farmers on over 2,600 hectares of land. They estimate that they can generate more than $1 million in direct income for the local economy each year.The company’s big plans are backed by a consortium of investors including Goodwell Investments, the Netherlands venture capital firm. The investment was made through Alitheia Capital, the Nigerian investment management company that co-owns the $75 million IDF fund for women-led businesses. Mobola da-Silva, a partner at Alitheia, says “Tomato Jos has chosen the right market, business model and management to succeed as a truly inclusive business within this environment.”

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Goodwell’s investment in Tomato Jos is from the firm’s €100 million uMunthu fund focused on financial inclusion, agribusiness and other inclusive growth sectors in sub Saharan Africa. Alitheia’s previous investments as Goodwell’s West Africa partner include Paga, MAX and Lidya.“As an agro-processing company that sources from local smallholder farmers and provides affordable access to finance in the form of farming inputs to farmers, Tomato Jos is a good fit for uMunthu’s inclusive strategy of investing in agribusiness,” da-Silva said. Other participants in the Series A round include Acumen Capital Partners, a Canadian investment firm, and VestedWorld, a US-based firm whose portfolio also includes Kenya’s logistics startup Sendy. It is expected that Tomato Jos will lead the way in providing that middle of the way expertise needed in Nigeria’s agricultural sector.

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At a time when Nigeria is aiming for food security, investors are seizing this opportunity to come after Nigeria’s Tomato Jos, an agro-processing company focused on the local production of tomato paste for the African market. The company has announced it had just completed a $4.2 million Series A round to further improve the lives and incomes of smallholder farmers and increase the sustainability and stability of food supply in Nigeria.

“I am really excited to partner with investors who understand and care about who Tomato Jos is, what we are trying to accomplish, and why this work matters so much,” noted Mira Mehta, founder and CEO of Tomato Jos, on the investment.

Here Is What You Need To Know

• This round of investment was led by Goodwell Investments, via its West Africa partner Alitheia Capital, with participation from Acumen Capital Partners and existing investor VestedWorld.
• The combined $4.2 million Series A funding will boost Tomato Jos’ transition to its next stage of growth — the processing and distribution of tomato products.
• The funding will also assist the startup to install a drip irrigation system and a processing plant that can produce 24 tons of finished product per day. 
• Tomato Jos will also work with thousands of smallholder farmers on over 2,600 hectares of land, putting more than $1M of direct income into the local economy each year.

“Processing has always been the plan for Tomato Jos, but to get there, we spent a long five years working only on farming and primary production to make sure that we had a really solid foundation in place,’’ said Mira. “Everyone at the company is extremely excited to take this big step forward into the world of food processing and value-add production!”

Why The Investors Invested

At a time when Nigeria is reaching for food sufficiency, coupled with the disruption in the global supply chain caused by the coronavirus pandemic, it seems almost investment-savvy that investors would be staking their odds with the startup. In August 2019, Nigeria’s President Muhammadu Buhari announced a total ban on forex for food importation into the country. The country’s central bank has since followed it up by a statement that the policy has since commenced. 

The above fact is also coupled with the fact that although Nigeria is the second-largest producer of tomatoes in Africa, farming inefficiencies create a demand-supply gap resulting in Nigeria also being one of the biggest importers of tomato paste in the world.

“With a rapidly growing population driving demand and an increasing focus on improving the sufficiency of the agriculture sector, there is a big opportunity for domestic tomato paste production,” said Mobola da-Silva, Partner at Alitheia, Goodwell’s investment partner in West Africa. “Tomato Jos has chosen the right market, business model and management to succeed as a truly inclusive business within this environment. As an agro-processing company that sources from local smallholder farmers and provides affordable access to finance in the form of farming inputs to farmers, Tomato Jos is a good fit for uMunthu’s inclusive strategy of investing in agribusiness.”

Also speaking on the investment, Tamer El-Raghy, Managing Director of Acumen Capital Partners said:

“Acumen Capital Partners is thrilled to join Tomato Jos’ investors to help the company continue to develop a world-class vertically integrated tomato processing operation in Nigeria. Tomato Jos is positioned not only to locally produce tomato paste, which is mainly imported into Nigeria but to help Nigerian smallholder farmers increase their income by increasing their yield by 3–4x.”

According to Jeffrey Stine, Managing Director of VestedWorld (existing investor which had previously invested in Tomato Jos in 2017) and Tomato Jos Board Member , the resilience of the startup’s team is charming, hence the follow-on investment. 

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A Look At What Tomato Jos Does

• Founded by the Finnish/Indian and American citizen Mira Mehta in 2014 with the vision to create and retain local value-add to the tomato value chain, reduce post-harvest losses, and improve the lives of smallholder farmers, Tomato Jos has since its inception focused on securing its supply chain through primary production. 
• The company has focused solely on primary production of tomatoes, soya, and maize to demonstrate that global excellence in agriculture is achievable in Nigeria, to train a large network of smallholder farmers to grow high-quality produce for the company under mutually beneficial systems; and to guarantee enough raw material (tomatoes) to support an investment in a tomato processing facility.
• By connecting local farmers to domestic consumers, Tomato Jos helps to improve the lives and incomes of smallholder farmers and increase the sustainability and stability of food supply in Nigeria. 
• The startup directly supports over 70 smallholder farmers across three growing cycles. During this time, smallholder farmers’ average yield has grown by over 340% from 5 to 22 metric tons per hectare, while their average income increased by 455%.
• Based in Kaduna, North Western Nigeria, Tomato Jos, growing from 2Ha to the current 500Ha, now operates the largest active tomato farm in Nigeria and has over 2,500 Nigerians in its employment.

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.