Hatch Africa, a poultry business targeting underserved rural households, has raised $9.5 million investment with participation from AgDevCo and IDH Farmfit Fund to scale the business to millions more smallholder farmer households across Africa.
The investment was made into Flow Equity Africa Ventures (FEAV), the holding company for Hatch’s operations in Kenya, Ghana, and Cote d’Ivoire.
According to Hatch Africa Co-founder Joseph Shields, “We couldn’t achieve the scale of impact and commercial progress Hatch Africa is making without the support of committed, long-term investors like AgDevCo and IDH, who understand our markets and can provide flexible financing that suits our needs. We are excited about our next phase of growth, building Hatch Africa into a truly pan-African business.”
Founded in 2010, the company now reaches 4.6 million rural households in Ethiopia, Uganda, and Rwanda, where it operates under the brands EthioChicken and Uzima Chicken. In Ghana and Cote D’Ivoire, Hatch will operate under the brand Premier Poultry and Prestige Poultry respectively. Kenya will adopt the Uzima Chicken brand, which means “full of life” in Swahili.
Hatch Africa, which aims to make farmers healthier and wealthier by distributing dual-purpose breeds of day-old-chicks through a large network of agents, who rear the birds to maturity at around five weeks before selling them to smallholders. Hatch chickens are well-suited to being raised in “backyard” conditions and its customers typically own between 5 and 20 birds each. Compared to indigenous breeds, Hatch chickens grow faster, lay more eggs and are more resistant to disease.
“We are pleased to continue funding Hatch as it grows beyond Ethiopia. This is our third round of investment into the company, in each case supporting greenfield expansion,” said AgDevCo’s Managing Director for East Africa, Rebecca Sankar. “We look forward to working with the management team to deliver more impact, including higher incomes and improved nutrition for rural households, across East and West Africa.”
Over 85% of households in sub-Saharan Africa raise chickens at home, but struggle with low-yielding breeds and high mortality. Hatch Africa supplies small-scale producers with fully vaccinated, high-yielding, dual-purpose chickens that are tropically adapted, free-ranging, semi-scavenging, and thrive in village conditions.
Hatch Africa plans to grow its impact six-fold by 2030, increasing the number of chickens sold annually from 45 million to 340 million. The company’s vision is to reach every farmer and achieve one chicken per person per year in each country where it operates.
Hatch reaches an estimated 4.6m farmers annually with its products, creating more than $800m in additional profit each year for smallholder farmers. Hatch smallholder farmers earn an average of $190 of profit per year with a flock of 10 chickens, more than 3x the return of farming local chickens. Hatch has over 16,000 agents who earn an average of $1,600+ of profit per year, injecting a significant amount of money into rural communities.
“I am proud that the IDH FarmFit Fund provided debt funding to Hatch Africa, for expansion in Kenya, Ghana, and Côte d’Ivoire. Through its distinctive distribution structure, Hatch Africa ensures access for the rural population to high-quality dual-purpose chickens, where currently only low-yielding, local breeds are accessible. The transformational nature of this business makes this a very exciting investment for the Fund.”, said Mr. Roel Messie, CEO, IDH Investment Management, the manager of the IDH Farmfit Fund.