Private equity firm AgDevCo raises $32 million for establishing AgDevCo Ventures, an entity aimed at investing in agricultural businesses across Africa.
AgDevCo Ventures, a new investment branch within the AgDevCo group, is set to commence operations by early 2025. This initiative aims to support early-stage agribusinesses in Africa, focusing on the "missing middle" segment, with investments ranging from $1 million to $3 million.
The UK government, through the Foreign, Commonwealth, and Development Office (FCDO), has consistently supported AgDevCo's mission in promoting sustainable agribusinesses across Africa. In fact, the UK government is set to contribute over half of the total $50 million fund for AgDevCo Ventures.
AgDevCo has already demonstrated its commitment to this cause, having committed $210 million to 38 investments across 11 sub-Saharan African countries as of June 2024. Notable investments include $7.7 million in the Kenyan agribusiness Agris, $7.2 million in the Pan-African Hatch Africa, and $10 million in Côte d'Ivoire's Cashew Coast.
Initially, AgDevCo Ventures will support East African countries: Kenya, Uganda, Tanzania, and Rwanda. However, the initiative plans to broaden its reach to additional African regions in the future.
Lord Collins of Highbury has emphasised the importance of stable food markets. He stated that providing stable incomes, creating jobs for the youth, and helping to eradicate malnutrition are essential objectives. The portfolio is expected to include a significant proportion of African and female-owned businesses.
AgDevCo's return to the early-stage SME sector has been facilitated by its recent profitability. The group is in the process of raising an additional $25 million in impact investment capital, with the remaining funds for AgDevCo Ventures to be sourced from additional investors.
AgDevCo Ventures will operate as a distinct investment branch within the group, with a dedicated team based in Nairobi. The UK government has recently increased funding and launched new partnership initiatives to support AgDevCo's mission of promoting sustainable agribusiness in Africa, focusing on climate-smart agriculture and smallholder farmer inclusion.
This new investment initiative is poised to generate jobs, enhance smallholder farmer incomes, and strengthen climate resilience in Africa, making it a significant step towards sustainable development in the continent.
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