East Africa AgroFund will be investing up to $500,000 (about Sh1.14 billion) in any startup firm within the agricultural value chain
Dar es Salaam. Agri-startups in Tanzania can now look forward to new means of financing their operations beyond traditional sources, thanks to an initiative by an outsourced corporate venture capital fund.
The fund, known as East Africa AgroFund, is set to invest up to $500,000 (about Sh1.14 billion) in any startup firm within the agricultural value chain.
The EA AgroFund is the first Outsourced Corporate Venture Capital (OCVC) which allows organisations in agri-industry to find and invest in promising agri-startups for strategic and financial benefits.
The Dar es Salaam-based financial and investment advisory firm, SSC Capital, is managing the fund.
The SSC Capital chief executive officer, Mr Salum Awadh, told The Citizen yesterday that the company believed that better means of financing agriculture are important for Tanzania to meet its industrialisation goal.
“The sector plays a better role in building an industrial economy…I think investing in agriculture is a no-brainer. All facts and figures point to the need for innovative financing beyond traditional sources,” he explained.
He further pointed out that industrialisation in Tanzania will easily take off if the primary focus is on agro-based industries, given the competitive advantage the fund will stimulate more innovative activities in the supply chain that will positively impact industrialisation.
For agri-start to be qualified for funding, Mr Awadh said, it must be an existing business preferably, with innovative business models that de-risk the sector and that all activities across the supply chain can be covered.
The fund, he said, targets to invest in between four to five startups a year, depending on the quality of the deal pipeline.
With a target deal of Sh1.142 billion, EA AgroFund targets to build a portfolio of at least $10 million (about Sh22.844 billion) in five years.
The public launch of the fund is expected to be done this month.