Emata, a pioneering startup in Uganda’s agritech sector, has secured substantial seed funding of $2.4 million (approx. UGX8,939,601,600), the fintech startup announced on its LinkedIn Page. This funding is not just a number but a testament to the potential and trust that investors see in the agritech landscape of East Africa.
Emata’s funding is a combination of $800,000 (approx. UGX2,979,867,200) in equity and a significant $1.6 million (approx. UGX5,959,734,400) as on-lending capital. The backing for this impressive seed funding comes from a consortium of high-profile, impact-driven investors.
African Renaissance Partners, a venture capital firm focusing on entrepreneurs in East Africa and the Horn of Africa, is one of the primary backers. Europe’s largest impact tech ecosystem, Norrsken Accelerator, also played a pivotal role. Other notable contributors include Zephyr Acorn, which invests in early-stage technology ventures in East Africa, the globally recognized venture philanthropy firm Draper Richards Kaplan Foundation, and the esteemed Swedish angel investor, Marcus Bostrom.
“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,” Bram Willem van den Bosch, Founder, and CEO of Emata said in a statement.
Emata’s Innovative Approach
Bram van den Bosch expressed his enthusiasm about the funding. He emphasized how Emata is challenging farmers to envision bigger possibilities and is actively working to remove the traditional barriers that have kept agricultural finance out of reach for many.
With Emata’s innovative approach, what was once a lifelong challenge is now streamlined into a process that takes mere minutes. Emata’s target markets in East Africa alone are valued at $13 billion (UGX48.4 trillion).
Established in 2020, Emata has been at the forefront of leveraging technology and forming strategic partnerships with agricultural cooperatives. This approach allows them to offer farmers digital financing solutions that are not only affordable but also tailored to their needs.
Instead of traditional collateral, Emata innovatively creates alternative credit scores based on various data points, such as a farmer’s delivery history.
The Plans Ahead
With this fresh infusion of funds, Emata has ambitious plans. They aim to broaden their agri-loan offerings across East Africa, starting with their home ground, Uganda, and potentially expanding to countries like Tanzania.
The primary focus will be on scaling their core markets, specifically dairy and coffee. Emata, being a multi-crop company since its inception, also has operations in oilseeds and maize, and plans are in place to venture into the potato sector.
Emata’s business model is timely, especially as East Africa is on a rapid digitization trajectory. By offering automated loans to farmers, Emata addresses the region’s agricultural financing gap. Their approach not only reduces costs but also provides loans to smallholders at rates that are five times more affordable than traditional informal loans.
The entire lending process has been digitized by Emata, and they have integrated themselves deeply into the agricultural value chain through partnerships with cooperatives and farmer-based organizations. This integration not only facilitates rapid scaling but also minimizes risks.
In 2022, Emata showcased a remarkable growth trajectory, growing sevenfold year-on-year. They have successfully collaborated with 50 agricultural partners, reaching over 40,000 individual farmers, and have disbursed loans worth $1 million (UGX3,724,834,000).