Tomato Jos secures Series A round funding of €3.9m

Tomato Jos, an agro-processing company focused on the local production of high-quality tomato paste for the African market, has announced it had completed a €3.9 million Series A round.

Goodwell Investments, via its West Africa partner Alitheia Capital, led the round with participation from Acumen Capital Partners and VestedWorld.

Tomato Jos was founded by Mira Mehta in 2014 with the vision to create and retain local value-add to the tomato value chain, reduce post-harvest losses, and improve the lives of smallholder farmers.

Since its inception, Tomato Jos has focused on securing its supply chain through primary production. The combined €3.9 million Series A funding boosts the transition to its next stage of growth — the processing and distribution of tomato products. Growth plans include the installation of a drip irrigation system and a processing plant that can produce 24 tons of finished product per day. At scale, Tomato Jos will work with thousands of smallholder farmers on over 2,600 hectares of land, putting more than $1 million of direct income into the local economy each year.

“Processing has always been the plan for Tomato Jos, but to get there, we spent a long five years working only on farming and primary production to make sure that we had a really solid foundation in place,” said Mira Mehta, founder and CEO of Tomato Jos, on the investment. “Everyone at the company is extremely excited to take this big step forward into the world of food processing and value-add production!”

While Nigeria is the second-largest producers of tomatoes on the continent, farming inefficiencies create a demand-supply gap resulting in Nigeria also being one of the biggest importers of tomato paste in the world. Tomato Jos works to increase yields and incomes of the local smallholder tomato farmers it works with, boosting the sector with an improved capacity of farmers, reduced post-harvest losses, and a high-quality product.

“With a rapidly growing population driving demand and an increasing focus on improving the sufficiency of the agriculture sector, there is a big opportunity for domestic tomato paste production,” said Mobola da-Silva, partner at Alitheia, Goodwell’s investment partner in West Africa.

“Tomato Jos has chosen the right market, business model and management to succeed as a truly inclusive business within this environment. As an agro-processing company that sources from local smallholder farmers and provides affordable access to finance in the form of farming inputs to farmers, Tomato Jos is a good fit for uMunthu’s inclusive strategy of investing in agribusiness,” da-Silva said.

By connecting local farmers to domestic consumers, Tomato Jos helps to improve the lives and incomes of smallholder farmers and increase the sustainability and stability of food supply in Nigeria. Tomato Jos directly supports over 70 smallholder farmers across three growing cycles. During this time, smallholder farmers’ average yield has grown by over 340 percent from 5 to 22 metric tons per hectare, while their average income increased by 455 percent.

CrossBoundary provided advisory support to this transaction through USAID’s INVEST program, funded by the USAID Southern and East Africa Regional Missions in support of the US Government’s Prosper Africa initiative. The advisory support helped Tomato Jos respond to critical investor questions as part of the due diligence process; and enabled Goodwell Investments, Acumen and other investors to gain further insight into the size of the opportunity and the value that Tomato Jos has created up to this point.

“Acumen Capital Partners is thrilled to join Tomato Jos’ investors to help the company continue to develop a world-class vertically integrated tomato processing operation in Nigeria,” said Tamer El-Raghy, managing director of Acumen Capital Partners. “Tomato Jos is positioned not only to locally produce tomato paste, which is mainly imported into Nigeria but to help Nigerian smallholder farmers increase their income by increasing their yield by 3-4x.”

“As investors in the Tomato Jos business since 2017, we are incredibly proud of this dedicated, resilient team and recognize the many obstacles overcome to get us to this point. The addition of Goodwell Investments, Alitheia, and Acumen Capital Partners will be a great resource for this highly impactful company, and we look forward to working with them,” remarked Jeffrey Stine, managing director of VestedWorld and Tomato Jos Board Member.

“I am really excited to partner with investors who understand and care about who Tomato Jos is, what we are trying to accomplish, and why this work matters so much,” noted Mehta.

Tomato Jos is an African agricultural production company that believes in the power of farming and processing local food products for local consumption. Established in 2014, Tomato Jos has focused solely on primary production of tomatoes, soya, and maize to demonstrate that global excellence in agriculture is achievable in Nigeria, to train a large network of smallholder farmers to grow high-quality produce for the company under mutually beneficial systems; and to guarantee enough raw material (tomatoes) to support an investment in a tomato processing facility. Growing from 2Ha to the current 500Ha, the company has made tremendous leaps towards higher yields at lower production costs. Tomato Jos relocated to Kaduna in 2017 and the State Government has provided consistent invaluable support with the result that Tomato Jos now operates the largest active tomato farm in Nigeria and supports 2,500 Nigerians through direct and indirect employment.

Goodwell Investments is a pioneering impact investment firm focused on inclusive growth in sectors providing basic goods and services and income generation opportunities to underserved communities in Africa and India. The firm provides early-stage equity to high growth, high impact businesses. With teams in Kenya, Nigeria, South Africa and Amsterdam and a track record of over ten years, Goodwell demonstrates the ability to simultaneously deliver significant social impact and strong financial returns.

Alitheia Capital is an investment management firm focused on channelling capital into businesses that enhance access to essential goods and services for small and growing businesses and low-income households. Alitheia has a proven track record of financing and supporting entrepreneurial businesses that address a business, social or environmental need.  Alitheia’s investments include businesses that enable the provision of: financial services to the un(der)banked through traditional and digital banking models; off-grid energy to businesses and households; affordable, clean cooking fuel to low income households; and mobility solutions that tackle the challenges of urban mobility in emerging economies.

Acumen Capital Partners’ Climate Resilience Initiative is focused on investing in companies with business models that help smallholder farmers in East and West Africa become more resilient to climate change.

VestedWorld is an early-stage investment fund manager that invests in companies that have the potential to generate competitive financial returns while contributing towards the growth and development of the markets in which they are located. The firm supports these businesses through the infusion of capital, active involvement in corporate governance and by providing direct strategic and operational assistance.