The Kenya-based agri-tech startup FarmDrive has received a new round of investment from five international firms including Engineers Without Borders (EWB) Canada, 1 to 4 Foundation, ADAP Seed Fund 2, AK Impact Investors, and The Lakes Charitable Foundation.
Founded by Bosire and Rita Kimani in 2014, FarmDrive, has developed a proprietary lending engine to extend loans to farmers by using a combination of agriculturally relevant data, Know Your Customer (KYC) data, and advanced behavioral analytics.
The agri-tech startup firm has previously raised funding from the likes of Safaricom and EWB Canada. It is expected to use the follow-on investment money to expand its operations and provide access to credit for three million smallholder farmers.
The investment will allow FarmDrive to scale to US$13 million of loan originations in 2019 with minimal losses and exceptional returns using RiPe, a customisable lending engine that will allow lenders to plug in and access low-cost loan origination channels such as USSD, credit scoring, identity verification, and a portfolio management suite that includes recovery and collections, payments, customer support, and advanced real-time data analytics.
“We are delighted for this investment from strategic investors to enable us to build financial identities for more smallholder businesses and scale our low-cost distribution model,” said Peris Bosire, the startup’s co-founder. “We are going where banks haven’t reached and are creating a trust ecosystem in the most unstructured sector in sub-Saharan Africa – Agriculture.”
In an email sent to Ventureburn, Bosire noted that the investment was “an undisclosed pre-seed round” aimed at helping the startup prepare for its seed raise.
While EWB Canada did not disclose the size of the latest investment in FarmDrive, Elena Haba, acting director of investments at EWB Canada, said the agri-tech company has the potential to shift market attention and fill the credit gap between creditors and underserved small business owners like smallholder farmers.
“We believe that addressing this credit accessibility issue is a seminal first step towards building more inclusive and sustainable economies,” Haba said.