Emata, the agricultural finance solution for East African farmers, has announced the completion of a $2.4 million seed fundraise, comprising $800,000 in equity and $1.6 million in on-lending capital.
The fundraising was backed by African Renaissance Partners – the VC firm investing in entrepreneurs in East Africa and the Horn of Africa; Norrsken Accelerator; Zephyr Acorn; angel investor Marcus Boström; and global venture philanthropy firm – Draper Richards Kaplan Foundation.
Proceeds will be used to expand Emata’s agri-loan offering across East Africa – both within its debut market of Uganda and via imminent international expansion – which is most likely to be Tanzania. It will focus on scaling its core markets – dairy and coffee. A multi-crop company from inception, Emata’s other operations are oilseeds and maize, whilst expansion is also anticipated into potatoes.
As East Africa rapidly digitizes, Emata’s business model addresses East Africa’s lack of agricultural financing – by providing automated loans to farmers.
This reduces cost and enables lending to smallholders at rates 5x more affordable than the informal loans they have often relied on to date. Instant lending and data-based decisions also benefit all farmers, without the need for collateral.
Emata has digitized the full lending process and is embedded in the agricultural value chain – via its partnerships with cooperatives and farmer-based organizations – which aids rapid scaling.
Such partnerships also de-risk Emata’s business model, as they provide access to a direct source of repayment – as loan repayments are deducted by Emata’s partners on its behalf. By solving the financing challenge, Emata helps farmers raise their productivity, and increase income and food production.
In 2022, Emata grew 7x year-on-year, is now live with 50 agricultural partners – reaching over 40,000 individual farmers – and has disbursed $1 million of loans.
Emata’s credentials have already attracted global attention. The multiple award-winning company won the coveted “Best Newcomer / Best New Startup” at the 2023 Global Startup Awards – beating 80,000 other start-up entrants from around the world and was named on Yale Africa Startup Review’s list of 30 startups to watch in 2023.
Bram Willem van den Bosch, Founder & CEO of Emata, said: “We are thrilled to complete our $2.4 million seed fundraise, 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.
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.”
Magdi 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 toward 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.”
