Emata – the agricultural finance solution for East African farmers – announced that it has successfully completed a $2.4 million seed fund raise, comprising $800,000 in equity and $1.6 million in on-lending capital. The fund raise was led by African Renaissance Partners – the VC firm investing in entrepreneurs in East Africa and the Horn of Africa; Norrsken Accelerator – an investment arm of Europe’s largest impact tech ecosystem; Zephyr Acorn – an investor in early-stage technology businesses in East Africa; renowned Swedish angel investor Marcus Boström; and global venture philanthropy firm – the Draper Richards Kaplan Foundation.
The proceeds from this funding round will be utilized to expand Emata’s agricultural loan services throughout East Africa. This expansion will encompass both its initial market, Uganda, and an imminent international expansion, which is highly likely to take place in Tanzania. Emata’s primary focus during this expansion will revolve around amplifying its presence in its core markets, specifically the dairy and coffee sectors. Notably, Emata, which initially operated as a multi-crop company, has additional operations in oilseeds and maize, with plans for further expansion into the potato market.
In a rapidly digitizing East African landscape, Emata’s business model directly addresses the critical issue of agricultural financing in the region. By offering automated loans to farmers, Emata significantly reduces the cost associated with borrowing and facilitates access to affordable credit for small-scale farmers. This is a noteworthy achievement, as it provides an alternative to the informal loans that many farmers have historically relied upon. Emata’s lending process is not only swift but also data-driven, benefiting all farmers without necessitating collateral.
One of Emata’s strengths lies in its complete digitization of the lending process, seamlessly integrated into the agricultural value chain through strategic partnerships with cooperatives and farmer-based organizations. These partnerships not only expedite Emata’s expansion efforts but also mitigate risks associated with its business model. This is achieved by granting Emata direct access to repayment sources, as loan repayments are deducted by its partners on the company’s behalf. By effectively addressing the financing challenge, Emata empowers farmers to enhance their productivity, augment their income, and contribute to increased food production.
In the year 2022, Emata achieved an impressive sevenfold year-on-year growth rate. It is currently operational with 50 agricultural partners, facilitating access to over 40,000 individual farmers, and has successfully disbursed loans totaling $1 million.
Emata’s outstanding track record has garnered global recognition. The company has received numerous awards, including the prestigious “Best Newcomer / Best New Startup” accolade at the 2023 Global Startup Awards, surpassing competition from 80,000 startups worldwide. Additionally, Emata has earned a place on the Yale Africa Startup Review’s list of 30 startups to watch in 2023, further solidifying its status as a pioneering force in the agricultural financing sector.
Bram van den Bosch, Founder & CEO of Emata, said:
“We are thrilled to complete our $2.4 million seed fund raise, backed by high-profile, impact-oriented investors who recognize the huge potential of digital agri-loans in East Africa, and beyond. Emata dares farmers to dream big and eliminates traditional obstacles that have made agricultural finance unavailable for the vast majority. Our solution turns a lifelong struggle into a five minute process, and is already tangibly impacting thousands of East African farmers.”
The need for agricultural finance in Sub-Saharan Africa is estimated at $240 billion by consultancy firm Dahlberg, with the value of Emata’s target markets in East Africa being $13 billion.
Other awards won by Emata include those from ‘CATAPULT: Inclusion Africa’ and ‘Fintech Abu Dhabi: The Search in Africa’. They are alumni of the Stockholm-based Norrsken Impact Accelerator and Silicon Valley-based Plug and Play Tech Center Accelerator.
Magdi A. Amin, Managing Partner at African Renaissance Partners, commented:
“We are delighted to back Emata – the digital and affordable solution for East African farmers. Our portfolio is geared to high-growth companies that use technology to solve real problems that Africans face every day. Emata is a perfect fit for us: growing rapidly, with many competitive differentiators, digital strategy at its core, and materially impactful. The company has a great future ahead and we look forward to working closely with its management team.”
Kanini Mutooni, Managing Director at Draper Richards Kaplan Foundation, commented:
‘’Emata is one of those rare early-stage companies that has a business model where impact is seamlessly baked in; more loans to farmers means increased financial inclusion for farmers who would never have had access to formal credit. This investment represents the ultimate sweet spot for DRK and we are delighted to welcome Emata into our Africa portfolio.’’
Alex Bakir, General Partner at Norrsken Accelerator, commented:
“Norrsken Accelerator invested in Emata because we believe their team and model places them in the top 1% of impact companies, globally. We’re excited to support the team on the next leg of their impact journey.”
Mike Mbari, Investment Principal at Zephyr Acorn, commented:
“We are excited about this partnership with Emata. With agriculture contributing 25% to East Africa’s economy and employing over 70% of the population, improving access to affordable and flexible financial services such as credit facilities is poised to spur economic growth and improve livelihoods. Emata fits well within Zephyr Acorn’s thesis of investing in promising and impactful high-growth start-ups that are utilizing technology to bring vital services to the underserved markets in East Africa.”
