Every day, millions of farmers around the world are faced with the challenge of growing and scaling their farming enterprises with limited financing resources. Often these farmers are overlooked by traditional banks and, when they access lending – for example through mobile platforms – loans are frequently unadapted to their needs and often fraught with predatory strings that provide little to no security over their business.
According to research conducted by Dalberg Global Development Advisors, $31bn of financing was made available to smallholders in 2015, which represented less than 7 percent of the total smallholder financing needs, estimated at $450bn globally. In Sub-Saharan African economies in particular, this issue becomes more acute when you take a deeper look at bank lending. The World Bank noted recently that, even though agriculture contributes to 18 percent of GDP in Sub-Saharan Africa, bank lending allocated to agriculture represents only 1 percent.
Apollo Agriculture provides African farmers with agricultural inputs, farming advice, insurance and appropriate financing to help them move from subsistence farming to growing a sustainable business. By leveraging advances in satellite data, machine learning and automated operations, Apollo Agriculture is able to appropriately underwrite farmers who do not necessarily have a financial record. Once approved, farmers can collect their inputs and get a repayment plan that is in line with harvesting plans. Ultimately, this helps farmers increase their yield one season after the other.
But, a good product is not enough to go the distance; you also need a passionate team to deliver it. The Apollo Agriculture team brings together technology and operations experience from The Climate Corporation and One Acre Fund. Founders Eli Pollak, Earl St Sauver and Benjamin Njenga are at the helm of the business and have grown a talented international team whose mission is to support farmers in improving, diversifying and augmenting their crop portfolio. It is always very exciting to see an exceptional team so committed to solving some of the biggest issues that farmers have to face globally.
At Anthemis, we believe that the future of financial services is embedded, augmented and ubiquitous. From an investment perspective, this means the principal ingredients of financial services are a combination of financing, transactional and risk-management elements. I am particularly excited about Apollo Agriculture because it is a perfect marriage of technology, finance and risk-management, embedded in the agricultural space.
Moreover, the team is leveraging technology to enable underserved communities to access financial services in a low-cost and highly scalable way, making it possible to build a successful business while making an impact. Profit meets purpose or, as we define it, financial wellness.
We are pleased to share the announcement that we led Apollo Agriculture’s Series A round, joined by incredible investors such as Leaps by Bayer, Flourish Ventures and Accion. I am so thrilled that we will be working with Eli, Earl, Benjamin and the rest of the incredible team at Apollo Agriculture on this journey to change the way smallholders access financing.