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Nigerian agritech company ThriveAgric has raised 5.3 billion naira ($3.93 million) through its first commercial paper issuance, the company said on Tuesday.
The Series 1 issuance was oversubscribed after investors placed orders above ThriveAgric’s initial target of 5 billion Naira and is the first issuance under ThriveAgric’s 50 billion-naira commercial paper program approved by Nigeria’s Securities and Exchange Commission.
The company plans to use the proceeds to finance the purchase of agricultural produce from smallholder farmers and supply it to established buyers, Chief Executive Officer Uka Eje said at a signing ceremony and media briefing in Lagos.
“The initial problem we’ve always faced has been accessing the right capital,” Eje said.
ThriveAgric finances farmers, purchases their produce after harvest and sells the commodities to processors and fast-moving consumer goods companies. Eje said the commercial paper would primarily finance the commodity-trading part of the business.
“This is why it’s not equity; it is debt to expand our business in Nigeria,” he said.
ThriveAgric expects to make additional commercial paper issuances over the next 12 months under the 50 billion-naira program.
The company previously raised $56.4 million in debt financing in 2022 from local commercial banks and institutional investors. The financing was intended to support its farmer network and expansion into markets including Ghana, Zambia and Kenya.
ThriveAgric currently operates in Nigeria, Ghana, Kenya, Uganda and Rwanda, with Nigeria accounting for about 90% of its business, Eje said.
The latest funding will be focused on its Nigerian operations, including the purchase and aggregation of agricultural commodities.
Founded in 2017 by Eje and Ayodeji Arikawe, ThriveAgric provides financing and market access to smallholder farmers.
The company said it currently serves more than 1.3 million smallholder farmers across 26 Nigerian states and works with about 5,000 field agents.
ThriveAgric’s Agricultural Operating System, known as AOS, is used to collect and manage information on farmers and their agricultural activities, including onboarding, farm data collection, distribution of inputs, field monitoring and inventory management.
The company has also said it plans to use agricultural and transaction data to help farmers gain access to financial services.
ThriveAgric’s agricultural production activities can require nine to 12 months, while the purchase and sale of harvested commodities takes place over a shorter period, Eje said. The commercial paper will therefore be used primarily for the company’s shorter-term trading activities.
Anchoria Advisory Services acted as the lead issuing house for the transaction. BAS Capital, Mulberry, FCMB Capital Markets and FCSL were also involved in the issuance.
The 5.3 billion-naira transaction is the first issuance under the company’s 50 billion-naira program, leaving ThriveAgric with capacity to raise additional funds through the program. The company did not disclose the individual investors participating in the issuance.