Ugandan agritech startup Emata has raised $2.4 million in seed funding comprising $800,000 in equity and $1.6 million in on-lending capital.
The fundraising was backed by African Renaissance Partners – the VC firm investing in entrepreneurs in East Africa and the Horn of Africa; Norrsken Accelerator – an investment arm of Europe’s largest impact tech ecosystem; Zephyr Acorn – an investor in early-stage technology businesses in East Africa; renowned Swedish angel investor Marcus Boström; and global venture philanthropy firm – the Draper Richards Kaplan Foundation.
“We are thrilled to complete our $2.4 million seed fundraise, backed by high-profile, impact-oriented investors who recognize the huge potential of digital agri-loans in East Africa, and beyond. Emata dares farmers to dream big and eliminates traditional obstacles that have made agricultural finance unavailable for the vast majority. Our solution turns a lifelong struggle into a five-minute process, and is already tangibly impacting thousands of East African farmers.” Bram van den Bosch, Founder & CEO of Emata, said.
The need for agricultural finance in Sub-Saharan Africa is estimated at $240 billion by consultancy firm Dahlberg, with the value of Emata’s target markets in East Africa being $13 billion.
Founded in 2020, Emata leverages technology and partnerships with agricultural cooperatives to offer farmers affordable, digital financing. In place of collateral requirements, the company creates alternative credit scores based on data points like a farmer’s delivery history.
The company plans to use this new investment to expand its agri-loan offering across East Africa – both within its debut market of Uganda and via imminent international expansion – which is most likely to be Tanzania. It will focus on scaling its core markets – dairy and coffee.
A multi-crop company from inception, Emata’s other operations are oilseeds and maize, whilst expansion is also anticipated into potatoes.
As East Africa rapidly digitizes, Emata’s business model addresses East Africa’s lack of agricultural financing – by providing automated loans to farmers. This reduces cost and enables lending to smallholders at rates 5x more affordable than the informal loans they have often relied on to date. Instant lending and data-based decisions also benefit all farmers, without the need for collateral.
Emata has digitized the full lending process and is embedded in the agricultural value chain – via its partnerships with cooperatives and farmer-based organizations – which aids rapid scaling. Such partnerships also de-risk Emata’s business model, as they provide access to a direct source of repayment – as loan repayments are deducted by Emata’s partners on its behalf. By solving the financing challenge, Emata helps farmers raise their productivity, and increase income and food production.
In 2022, Emata grew 7x year-on-year, is now live with 50 agricultural partners – reaching over 40,000 individual farmers – and has disbursed $1 million of loans.