Nigerian startup Releaf, which develops proprietary hardware and software solutions to drive the industrialisation of food processing in Africa, has raised US$4.2 million in seed equity and grant funding to support the development and scaling of technology solutions for the oil palm sector.
Agri-tech startup Releaf was founded in 2017, and took part in the Y Combinator accelerator programme in Silicon Valley the same year, but only started operations in the oil palm space in 2019 and deployed its proprietary technology in January of this year.
The startup’s proprietary hardware increases the availability and quality of raw materials for food factories, while the sourcing software connects them directly to more than 2,000 smallholder farmers. Releaf also uses digital technologies including USSD and open banking to work seamlessly with its network of smallholder farmers, who have supplied over 10 million kilogrammes of quality palm kernel nuts to food factories.
To support further growth, Relief has raised US$2.7 million seed funding in a round led by Samurai Incubate Africa, Future Africa and Consonance Investment Managers with participation from Stephen Pagliuca, chairman of Bain Capital, and Justin Kan of Twitch. The startup has also secured US$1.5 million in grants from The Challenge Fund for Youth Employment (CFYE) and USAID.
The seed funding will enable the development of industrial food processing technology in Nigeria’s smallholder-driven oil palm sector while the grant will enable Releaf to provide working capital and other value-added services for smallholders and small-scale processors. Grant funding will support the training, recruitment and retention of more women and youth in Nigeria oil palm sector through the creation of both digital and technical jobs.
“Our mandate is to industrialise Africa’s food processing industry. This round of funding enables us to develop and prove our technology with smallholder farmers in the oil palm sector. Given Nigerians spend around 60 per cent of their income on food and Africa’s population is set to increase by 100,000 people per day over the next three decades, we’re presented with an incredible opportunity to feed more people, reduce consumer costs, and supply the fastest-growing food market in the world,” said Ikenna Nzewi, chief executive officer (CEO) and co-founder of Releaf.
“Releaf is committed to harnessing technology to accelerate the economic wealth of rural, agrarian societies throughout the continent. We firmly believe that a robust real economy is the foundation for long-lasting and shared prosperity for Africans and are excited to deepen partnerships with like-minded organisations, governments, and firms.”
This new funding will enable better productivity and accelerate the eradication of the menial and archaic processes that are prevalent across Nigeria’s oil palm sector and the agriculture sector as a whole. It will also enable Releaf to drive more value and profitability across the oil palm value chain, as well as support direct and ancillary job creation in the farming communities of South and Eastern Nigeria.
“Releaf’s novel approach to operating within the value chain with proprietary technology set it aside from many agri-tech startups we have spoken to. We believe the firm’s thesis on decentralizing food processing would have a strong match with Africa’s economic development landscape for the next few decades. Ikenna and Uzo are the perfect founders to disrupt this market in Nigeria and beyond. We are thrilled to back them as they innovate in providing both agro-processing and financial services to rural communities and farmers,” said Rena Yoneyama, managing partner at Samurai Incubate Africa.
Iyin Aboyeji, general partner at Future Africa said more than 50 per cent of the goods in supermarkets globally contain glycerine – an extract made from palm oil – a cash crop that is passed down from generation to generation.
“The team at Releaf is building the agro-allied industry of the future from the ground up starting with palm oil which they have developed novel technology to aggregate, deshell and process into critical ingredients like vegetable oil and glycerine. Future Africa is delighted to back Releaf to build the future of modern agriculture,” he said.