Releaf, a Nigerian agricultural technology firm that develops proprietary hardware and software solutions to drive the industrialisation of food processing in Africa, has raised US$4.2 million in seed investment and grant funding, to support the development and scaling of technology solutions for the oil palm sector in Nigeria. The company raised $2.7 million in seed funding, and received $1.5 million in grants from The Challenge Fund for Youth Employment (CFYE) and USAID.
The seed round was led by pan-African focused venture capital firms Samurai Incubate Africa, Future Africa and Consonance Investment Managers. Individual investors like Stephen Pagliuca, the chairman of Bain Capital, and Justin Kan of Twitch also participated.
Releaf was founded by Ikenna Nzewi and Uzoma Ayogu in 2017. After its launch, it participated in the Y Combinator accelerator programme in Silicon in the same year. It only ventured into the oil palm sector in 2019, with the aim of improving productivity in the Nigerian oil palm sector.
In Nigeria today, farmers suffer from distance and logistics problems. With these factors in play, farmers end up witnessing post-harvest losses, and have less money to work with. This situation is what Releaf is set out to improve.
Releaf is focused on value chains where smaller factories are set up near smallholder farmers. This allows farmers to get better processing yields and fewer logistics costs; in the end, the farmer has more money to work with. Its proprietary hardware increases the availability and quality of raw materials for food factories, while the sourcing software connects them directly to more than 2,000 smallholder farmers. Releaf also uses digital technologies including USSD and open banking to work seamlessly with its network of smallholder farmers, who have supplied over 10 million kilogrammes of quality palm kernel nuts to food factories.
Releaf plans to use the $2.7 million seed funding to develop technology and deploy it to smallholder farmers. On the other hand, it plans to use the $1.5 million in grants to providing working capital and other value-added services for smallholders and small-scale processors. The grant funding will support the training, recruitment and retention of more women and youth in Nigeria oil palm sector through the creation of both digital and technical jobs.
Speaking on the investment and the company’s ambitions, Releaf’s Chief Executive Officer and Co-founder, Ikenna Nzewi said: “Our mandate is to industrialise Africa’s food processing industry. This round of funding enables us to develop and prove our technology with smallholder farmers in the oil palm sector.”
Rena Yoneyama, the managing partner at Samurai Incubate Africa, said Releaf’s novel approach sets it aside from other agritech startups the venture capital firm has engaged with. “We believe the firm’s thesis on decentralizing food processing would have a strong match with Africa’s economic development landscape for the next few decades. Ikenna and Uzo are the perfect founders to disrupt this market in Nigeria and beyond. We are thrilled to back them as they innovate in providing both agro-processing and financial services to rural communities and farmers,” she added.
Iyin Aboyeji, a general partner at Future Africa— a co-lead investor at the round, also commended Releaf for developing a “novel technology to aggregate, deshell and process into critical ingredients like vegetable oil and glycerine.” Future Africa, she said, was delighted to back Releaf to build the future of modern agriculture.
Utilizing the new funds, Releaf plans to accelerate productivity in the Nigerian oil sector. The funds will also facilitate the eradication of the local, time-taking, and archaic processes that are prevalent across the oil palm sector in Nigeria.