Apollo, a Kenya-based agritech startup, has received $1 million in debt financing to support small-scale farmers. This was led by Agri-Business Capital (ABC) Fund.
This is coming after the agritech startup raised $6 million in Series A funding in May 2020, led by Anthemis Exponential Ventures. Other investors that participated in that round were Leaps by Bayer, Flourish Ventures, Sage Hill Capital, and Accion Venture Lab, among others.
The Agritech startup had raised over $10 million in seed capital, a debt round of over $460,000 in 2018, and $6 million in Series A funding in 2020.
The Nairobi-based agritech startup was founded in 2015 by Eli Pollak, Chief Executive Officer (CEO); Benjamin Njenga, Chief Customer Officer (CCO); and Earl Suaver, Chief Technological Officer (CTO) to help Kenyan farmers maximise their profits by providing services like financing, farming inputs, advice, and insurance to small-scale farmers.
Apollo uses machine learning and automated operations technology to help farmers access these services.
It also deploys machine learning models to assess if customers are creditworthy. And if they pass this assessment, they receive a voucher code via a text message to redeem their credit.
However, Apollo doesn’t give farmers credit in cash. Instead, credit is offered in seeds and fertiliser, which they are expected to repay in cash after harvest.
Pollak said that the funding would help Apollo to continue to support small-scale farmers and enable them to access its services. This will lead to a significant increase in their yields and income.
The agritech startup acquires customers through digital marketing channels, and it onboards them via its app through a network of over 1,200 field agents across Kenya.
Despite the effects of the Covid-19 pandemic, the startup claims to have grown its customer base by three times in the last year. Currently, Apollo says it serves 60,000 farmers.
Although most farmers grow maize, the startup plans to launch new crops and products that will prompt them to grow other varieties for profitable and commercial farming. While it’s not clear why Apollo chose debt financing over equity financing like angel investments and strategic partnerships, the former does not give investors an ownership stake. And it’s a less expensive source of capital, especially if the company is growing at a high rate.