KENYA – iProcure, B2B Kenyan agtech start-up supplying agricultural inputs, has announced the close of a US$10.2 million Series B funding round that raised debt and equity from a diverse group of international investors led by Investisseurs & Partenaires (I&P).
The funding will support iProcure’s expansion into Uganda and Tanzania, as well as the launch of a credit offering for agro-retailers to purchase supplies on credit.
Launched in 2014, iProcure has been connecting agricultural manufacturers and distributors to local retailers (agro-dealers), through its unique distribution infrastructure that interlinks agricultural supply chains via its proprietary distribution technology system.
By cutting out the multiple levels of middlemen in the traditional agricultural supply chain and providing technology-driven insights on supply levels and price, the company ensures the availability, quality, and delivery of critical agricultural inputs like fertilizers and seeds at up to 25% discount from prevailing market prices.
Niraj Varia, iProcure’s new CEO and former partner at iProcure key investor, Novastar Ventures, said, “In addition to bolstering our existing operations with more warehouses and delivery vehicles, this funding will expand iProcure’s product offering to include credit services and a new POS system for agro-dealers to better forecast their inventory needs and reduce pilferage within their shops.”
Iprocure currently connects 5,000 agro-dealers to different manufacturers but this number is set to grow as it onboards more partners and retailers across the three markets, and as it doubles its distribution hubs to 20, boosting its last-mile delivery.
For added reach, iProcure plans to extend zero-interest credit to agro-dealers, increasing their ability to purchase the hardware required to use its ERP system.
By plugging in more retailers to its system, iProcure will additionally, get access to data required to inform its growth strategy, including a buy-now-pay-later (BNPL) service currently in the pipeline.
“Work capital is an issue facing these retailers, and we’ve demonstrated that if we provide supplies on a BNPL model, retailers buy 30% more.
“This shows that retailers themselves are cash constrained and can’t buy all the inventory they can sell; meaning that farmers aren’t able to access all the inputs they need. The BNPL service we are introducing will sort this problem,” said Varia.
The Series B round was led by I&P and also saw participation from Novastar Ventures, British International Investment (BII), and Ceniarth, bringing the total funding raised by iProcure, so far, to US$17.2 million
Asif Noorani, Senior Investment Manager of Impact Investing at I&P, said “iProcure is playing a pivotal role in transforming the agricultural sector in Africa by digitizing the agro-retailer networks and making last-mile agricultural inputs distribution more efficient.
“At its core, iProcure is improving farmers’ access to genuine and affordable agricultural inputs by consolidating the region’s fragmented agricultural inputs sector. These processes ultimately lower the cost of food production and improve food security.”
Agro-dealers are the focal point for suppliers hoping to introduce new products into Kenya’s input markets, as they are trusted by millions of farmers to be sources of sound agricultural advice.
They are also well-spread across the country, giving them a broad coverage of farmer communities. Through agro-dealers, iProcure targets to double the reach of farmers to 2 million in the next one year.