AgDevCo, a specialist investor in African agriculture, has secured $32 million from the UK’s Foreign, Commonwealth, and Development Office (FCDO) to establish a new initiative, AgDevCo Ventures. This funding marks a significant expansion of AgDevCo's operations and aims to support early-stage agribusinesses across Africa, starting in East African countries.

Focus on Early-Stage Agri-SMEs

AgDevCo Ventures will concentrate on investments ranging between $1 million and $3 million, significantly smaller than the company’s typical larger investments. This initiative will prioritize early-stage agricultural small and medium-sized enterprises (agri-SMEs) with the goal of building the next generation of African agribusinesses. AgDevCo’s new strategy aligns with the company's commitment to fostering sustainable agriculture and providing financial opportunities where private investors are often reluctant to venture due to perceived risks and high transaction costs.

Initial Investments in East Africa

The first round of investments under AgDevCo Ventures will focus on East African countries, including Kenya, Uganda, Tanzania, and Rwanda—areas where AgDevCo has already established a presence. As the program grows, there are plans to extend the investment reach to other African regions. In addition to offering much-needed capital to early-stage agribusinesses, the initiative seeks to create jobs, increase rural incomes, and strengthen market access for smallholder farmers.

UK Government's Support for African Agriculture

The UK Minister for Africa, Lord Collins of Highbury, emphasized the transformational impact AgDevCo Ventures could have on food markets across the continent. By investing in early-stage agribusinesses, the program will provide stability to farmers and agripreneurs, create new jobs, and help address food insecurity and malnutrition. Lord Collins remarked on the importance of giving entrepreneurs access to funding to foster innovation and sustainable growth in African agriculture.

AgDevCo's Return to Early-Stage Investing

AgDevCo Ventures represents a return to early-stage investing for AgDevCo, which initially focused on smaller-scale investments between 2009 and 2017. The company’s shift back to this part of the market is a result of its recent profitability, driven by larger investments in more established companies. With the backing of the FCDO, AgDevCo Ventures aims to bridge the funding gap faced by smaller agri-SMEs and scale them into significant players in the African agriculture sector.

Leadership and Vision

AgDevCo CEO, Daniel Hulls, expressed gratitude for the continued support from the UK government, highlighting the importance of this funding in driving third-party capital investment into the agricultural sector. Hulls is optimistic about the impact AgDevCo Ventures will have on the African agricultural landscape, particularly in creating jobs and increasing rural incomes through the development of the next generation of agribusinesses.

Future Expansion and Impact

AgDevCo is currently raising an additional $25 million from development finance institutions and family offices to expand the reach of AgDevCo Ventures. The new investment strategy will be managed by a dedicated team based in Nairobi, drawing on expertise from across the AgDevCo group. The company expects AgDevCo Ventures to begin operations in early 2025, helping to enhance Africa’s agricultural resilience and improve climate sustainability through regenerative practices.

With the launch of AgDevCo Ventures, AgDevCo is set to make a significant impact on African agriculture by supporting early-stage agri-SMEs. Backed by the FCDO and other investors, this initiative promises to create jobs, increase market opportunities for smallholder farmers, and build the next generation of sustainable agribusinesses across Africa.