Releaf, a Nigerian startup that develops proprietary hardware and software solutions to drive the industrialisation of food processing in Africa, has raised US$4.2 million in seed equity and grant funding to support the development and scaling of oil palm technology solutions.
Agri-tech startup Releaf was founded in 2017 and participated in the Y Combinator accelerator program in Silicon Valley the same year, but it didn’t start operating in the oil palm space until 2019 and only deployed its proprietary technology in January of this year.
The startup’s proprietary hardware improves the availability and quality of raw materials for food manufacturers, while its sourcing software connects them with over 2,000 smallholder farmers. Releaf also works seamlessly with its network of smallholder farmers, who have supplied over 10 million kilogrammes of high-quality palm kernel nuts to food manufacturers, using digital technologies such as USSD and open banking.
Relief has raised US$2.7 million in seed funding from Samurai Incubate Africa, Future Africa, and Consonance Investment Managers, with participation from Stephen Pagliuca, chairman of Bain Capital, and Justin Kan, founder of Twitch. The Challenge Fund for Youth Employment (CFYE) and USAID have also given the startup US$1.5 million in grants.
The grant will enable Releaf to provide working capital and other value-added services to smallholders and small-scale processors in Nigeria’s smallholder-driven oil palm sector, while the seed funding will enable the development of industrial food processing technology in Nigeria’s smallholder-driven oil palm sector. Through the creation of both digital and technical jobs, grant funding will support the training, recruitment, and retention of more women and youth in the Nigerian oil palm sector.
“Our mandate is to industrialise Africa’s food processing industry. This round of funding enables us to develop and prove our technology with smallholder farmers in the oil palm sector. Given Nigerians spend around 60 per cent of their income on food and Africa’s population is set to increase by 100,000 people per day over the next three decades, we’re presented with an incredible opportunity to feed more people, reduce consumer costs, and supply the fastest-growing food market in the world,” said Ikenna Nzewi, chief executive officer (CEO) and co-founder of Releaf.
“Releaf is committed to harnessing technology to accelerate the economic wealth of rural, agrarian societies throughout the continent. We firmly believe that a robust real economy is the foundation for long-lasting and shared prosperity for Africans and are excited to deepen partnerships with like-minded organisations, governments, and firms.”
This new funding will boost productivity and speed up the elimination of menial and archaic processes that trouble Nigeria’s oil palm industry and agriculture sector in general. It will also allow Releaf to increase value and profitability throughout the oil palm value chain, as well as support direct and ancillary job creation in South and Eastern Nigerian farming communities.
“Releaf’s novel approach to operating within the value chain with proprietary technology set it aside from many agri-tech startups we have spoken to. We believe the firm’s thesis on decentralizing food processing would have a strong match with Africa’s economic development landscape for the next few decades. Ikenna and Uzo are the perfect founders to disrupt this market in Nigeria and beyond. We are thrilled to back them as they innovate in providing both agro-processing and financial services to rural communities and farmers,” said Rena Yoneyama, managing partner at Samurai Incubate Africa.
Glycerine – an extract made from palm oil – is found in more than 50% of supermarket goods worldwide, according to Iyin Aboyeji, general partner at Future Africa. Palm oil is a cash crop that is passed down from generation to generation.
“The team at Releaf is building the agro-allied industry of the future from the ground up starting with palm oil which they have developed novel technology to aggregate, deshell and process into critical ingredients like vegetable oil and glycerine. Future Africa is delighted to back Releaf to build the future of modern agriculture,” he said.