FarmWorks, a Kenyan agtech company on a mission to connect farmers to essential farm supplies and markets for their produce, has recently raised an impressive $4.1 million in a pre-Series A funding round. This latest investment was backed by current investor Acumen Resilient Agriculture Fund, bringing FarmWorks' total equity fundraising to an impressive $5.6 million. Other participants in the funding round included Vested World, Livelihood Impact Fund, and several angel investors.
The CEO of FarmWorks, Yi Li, who co-founded the company alongside Peter Muthee in 2020, expressed enthusiasm about the latest funding round. He stated that the capital infusion would be utilized to enhance their data analytics capabilities and apply artificial intelligence to optimize production processes and improve decision-making regarding planting and loan disbursement.
Operating an out-grower program that brings together over 2,000 smallholder farmers, FarmWorks has established a robust network of supply chains that ensure the timely delivery of high-quality products. Currently operating in two counties in Kenya's central region, the company has 16 collecting sites. With the new funding, FarmWorks aims to expand its network of contract farmers to other parts of Kenya, providing more smallholder farmers with access to essential farm inputs, pest control services, and a reliable market for their produce, both locally and for export.
Moreover, FarmWorks provides farmers with access to vital farming tools, including drip irrigation kits, to optimize their productivity. This comes as a significant boon to Kenya's agriculture sector, which accounts for 20% of the country's GDP and employs 70% of the rural population. Despite its importance, the sector faces numerous challenges, such as a lack of quality farm inputs, limited knowledge of good agricultural practices, inadequate advisory support, and unpredictable market conditions.
To address these challenges, FarmWorks offers comprehensive training programs for farmers, educating them about appropriate agricultural methods and showcasing these practices on its own experimental farms. According to Yi Li, FarmWorks is committed to addressing the core issue faced by Kenyan farmers—production. Low yields are primarily attributed to poor farming practices and soil degradation over time. By unlocking production potential and enhancing farmers' abilities, FarmWorks is making significant strides in boosting agricultural output and improving livelihoods.
In the past, FarmWorks operated its own farms, but it has since transformed them into training facilities to efficiently cover more farmers. Li explained, "There is a lot of operational expense in running a large farm, and we realized that for the same amount of effort, we can cover a lot more farmers." Scaling their out-grower strategy has proven highly successful and will enable FarmWorks to use its farms as educational centers for farmers, fostering a more sustainable and prosperous agriculture sector in Kenya.
Before embarking on the FarmWorks venture, Yi Li served as a management consultant for McKinsey in Kenya, leveraging his expertise to bring innovation to the agricultural landscape. In contrast, Peter Muthee boasts nearly three decades of experience in the agriculture sector, providing invaluable insights and leadership to FarmWorks' mission.
With this latest investment, FarmWorks is well-positioned to make a profound impact on Kenya's agriculture sector, empowering smallholder farmers, increasing yields, and contributing to the country's economic growth. As the company continues to leverage technology and innovation to support farmers, it stands as a beacon of hope for the future of sustainable and prosperous agriculture in Kenya.