AgDevCo, a specialist investor in African agriculture, has secured $32 million in funding from the UK’s Foreign, Commonwealth, and Development Office (FCDO) to set up AgDevCo Ventures, a new initiative that will back early-stage agribusinesses in Africa.
The venture will provide much-needed capital to small and medium enterprises (SMEs) with investment sizes ranging from $1 million to $3 million, focusing on the “missing middle” segment often overlooked by private investors.
AgDevCo Ventures will initially concentrate on East Africa, including Kenya, Uganda, Tanzania, and Rwanda, with plans to expand across the continent and prioritize African and female-owned businesses to promote inclusivity. It is also raising an additional $25 million from development finance institutions and family offices to kickstart operations by early 2025.
AgDevCo Ventures marks the firm’s return to the early-stage agribusiness space after shifting its focus to larger investments in recent years.
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The new initiative aims to fill the gap in funding for SMEs, particularly in Africa’s agriculture sector. These businesses face barriers such as high transaction costs and perceived risks, which deter traditional investors.
With support from the FCDO, AgDevCo has committed $210 million to 38 investments across sub-Saharan Africa as of June 2024. The company’s portfolio includes significant investments in Kenyan agribusiness Agris, Pan-African Hatch Africa, and Côte d’Ivoire’s Cashew Coast.
