• Sunday, April 14, 2024
businessday logo

BusinessDay

Releaf raises $3.3m to scale solutions in food processing

Releaf raises $3.3m to scale solutions in food processing

Releaf, an Africa-focused agritech company, has announced the raising of an oversubscribed Pre-Series A funding round on Monday. The funding will be used to support the launch of two new technologies; Kraken II and SITE.

The new funding is led by Tokyo-based venture capital firm Samurai Incubate Africa reinvesting in Releaf after leading its $2.7 million seed round in 2021. Consonance Investment Managers, Stephen Pagliuca (chairman of Bain Capital), and Jeff Ubben (board member at World Wildlife Fund and Founder of Inclusive Capital Partners) participated in the latest round.

Uzoma Ayogu, chief technology officer and co-founder of Releaf describes SITE and Kraken II as the next steps in the agritech’s plan to transform the efficiency of agricultural supply chains in Africa fundamentally.

“To make food supply chains profitable, we must maximise extraction yields with leading processing technology and minimise costs by bringing processing capacity closer to farmers,” Ayogu said. “Before Releaf, stakeholders had to choose between one or the other – large factories had great technology but were far away, leaving most farmers with rudimentary technology to process their crops. We’re now able to maximise both.”

Launched in 2021, Releaf has used its supply chain technology to process more than 10 million kilograms of palm nuts and grown its monthly revenue 7X year on year. The company has also secured more than $100 million in supply contracts from leading consumer goods manufacturers, including Presco, PZ Cussons, and more. The company’s valuation has tripled since its seed round a year ago.

Read also: Porting activities at record low 23 months after SIM card ban

The company said it developed SITE in collaboration with Stanford University’s David Lobell, a professor and MacArthur “Genius” Fellow and Director of the Center on Food Security and the Environment. Lobell’s team led the refinement of the age identification process for oil palm trees in Nigeria. This provided foundational yield data for the first layer of SITE. The application leverages cutting-edge geospatial mapping tools to determine how much oil palm is planted in an area and their annual yields, alongside Releaf’s proprietary data on soil type, rainfall, farmer productivity, and third-party data from organisations like the International Institute of Tropical Agriculture (IITA), Foundation for Partnership Initiatives in the Niger Delta (PIND), and Rocky Mountain Institute (RMI) to deliver a dynamic view of farming activity.

“I enjoyed working with Releaf and using our tree height algorithm to establish the correlation between oil palm age and height to help farmers to get a better understanding of their future yields and make better data-driven decisions on sustainable replanting. There is a great opportunity to unlock Africa’s unique agricultural potential by leveraging remote sensing solutions, and I believe this partnership will be a catalyst,” David Lobell said.

Releaf plans to deploy the data set to train Reinforcement Learning Models in SITE that identify the most optimal positioning of supply chain infrastructure for consumer goods manufacturers, creating an effective link with Africa’s decentralised farming system.

Releaf describes Kraken II as a portable, lower-cost version of Releaf’s Kraken – West Africa’s most advanced palm nut de-sheller. It is just as efficient as its static predecessor, and costs half as much. It can attain 3 times profitability because it can be transported to high-density farming areas, eliminating more than 80 percent of margin-eroding logistics costs. The combination of Kraken II’s portability and SITE’s placement and route planning capabilities enables Releaf to target the best opportunities across Nigeria’s oil palm belt rather than being limited to sourcing crops within 100 kilometers of a fixed processing site like existing food processors.

“Releaf’s success with its pilot Kraken validates its thesis, and we are excited to continue supporting their ambitious vision to create efficient supply chains within Africa’s agricultural market,” Rena Yoneyama, managing partner at Samurai Incubate Africa. “They have added key members to their management team and continue to impress us with their rapid commercial growth and technological development.”