In a move to bolster South Africa’s agricultural sector, Absa Bank, AECI, E Squared, and PepsiCo’s Kgodiso Fund have invested in Khula, a mobile marketplace designed to enhance farmers’ access to markets, logistics, technical expertise, and financing.
Khula’s Platform and Growth
The app currently serves 20,000 users, encompassing both emerging and established commercial farmers. The app and platform provide farmers with access to resources, financing, and market opportunities. Its Inputs App connects farmers to suppliers and services, while its Trading Platform links established farmers to buyers. Khula also collaborates with financial institutions to de-risk lending for small and semi-commercial farmers.
Funding and Expansion Plans
To date, the company has secured R126 million ($6.7 million) in a funding round led by E Squared Investments, with participation from existing shareholders, including South African specialty-chemicals company AECI Ltd. and Khula’s founders. The additional capital will support the expansion of Khula’s services within South Africa and potential expansion into new markets.
CEO Karidas Tshintsholo said, “Having started a few years ago just loading spinach in the back of a VW Polo, this milestone is a testament to the dedication of our team.”
Speaking on the deal, Absa Business Banking Executive Faisal Mkhize underscored the bank’s position as South Africa’s leading agricultural financier, while Managing Director of Aeci Plant Health, Quintin Cross reaffirmed the company’s ongoing commitment to nurturing emerging farmers.
Khula is now opening its Series A to new investors, seeking partners who can contribute beyond capital, with the second close expected by Q2 2025.
Addressing Agricultural Challenges in Africa
Africa’s agricultural sector employs about 60% of the continent’s workforce and possesses approximately three-fifths of the world’s uncultivated arable land. Despite this potential, the continent continues to import a significant portion of its food. The African Development Bank estimates an annual financing shortfall of up to $65 billion in Africa’s agriculture industry. Khula’s platform aims to bridge this gap by connecting farmers with buyers and providing essential resources, thereby enhancing productivity and food security.
Technological Innovations
Khula incorporates smart farming tools into its software to assist farmers in identifying crop diseases and improving yields. For instance, farmers can upload images of affected crops, and the app provides diagnostic information and potential solutions. This technological advancement empowers farmers with timely and accurate information, leading to better crop management.
Recognizing the critical need for financing in agriculture, Khula is exploring innovative funding solutions to support farmers. By facilitating connections between farmers and traders, the platform aims to address one of the significant barriers to agricultural growth in Africa.
The investments in Khula underscore a commitment to transforming South Africa’s agricultural landscape. By leveraging technology and providing essential resources, Khula is poised to enhance market access, productivity, and sustainability for farmers, contributing to the broader goal of food security and economic development in the region.
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