iProcure, once a rising star in East Africa’s agritech sector, has faced a turbulent year. The company, which was placed under administration in April 2024 after financial challenges left it unable to meet its obligations, has recently taken a significant step toward recovery. Speaking at a Mercy Corps AgriFin event, Stefano Carcoforo, co-founder of iProcure, revealed that the company had reacquired its core technology, a crucial element in its bid to revive operations.
From Humble Beginnings to a Multi-Million-Dollar Venture
iProcure was founded in 2012 by Carcoforo, alongside Nicole Galletta, Patrick Wanjohi, and Bernard Maingi. The company set out to revolutionize the agricultural supply chain in Kenya by providing agro-dealers and retailers with a mobile-based stock management system. “Back then, it was brutal,” Carcoforo reminisced, referring to the technical challenges of developing such software in the early days of Android smartphones. Despite these hurdles, iProcure grew from a modest startup to a key player, eventually expanding operations to three countries and serving over a million farmers through nearly 7,000 agro-dealers.
The concept was simple yet transformative. By offering retailers a tool to manage inventory on their phones and automate stock replenishment, iProcure provided a lifeline to agro-dealers struggling with inefficiencies. However, as Carcoforo revealed, the initial challenge wasn’t in building the technology — it was convincing agro-dealers to pay for it. “They balked at paying 500 shillings a month,” he said, despite the service significantly improving their operations. This forced the company to innovate, transforming the agro-dealers themselves into part of the business model by monetizing their purchasing data.
“You have obligations to your investors.”
iProcure’s trajectory caught the eye of investors. In August 2022, the company secured $10.2 million in Series B funding, raising hopes for further expansion across East Africa. By this time, iProcure was generating annual revenues of up to $14 million, with solid unit economics and a scalable model. The funding was expected to help the company expand and build a larger network, but with the influx of capital came new pressures.
“We were doing very well — profitable, with good margins, and solid revenue growth,” Carcoforo noted. But the arrival of new investors brought a wave of expectations. “You have obligations to your investors. We had to professionalize the business. That meant bringing in new management, people with big titles and big salaries,” he explained. The wage bill ballooned by 130%, and soon, the company found itself struggling under the weight of these new expenses, Carcoforo noted.
“We didn’t act fast enough”
As Carcoforo admitted, the company’s downfall was also due to strategic missteps. Despite warnings from advisors, iProcure remained heavily reliant on the fertilizer market, which was hit hard by government subsidies that undercut its business. “When the government introduced the subsidy, it wiped out 60% of our market overnight,” he said. The company also suffered from foreign-denominated debt, which became increasingly expensive as the Kenyan shilling depreciated.
Carcoforo reflected on these missed opportunities and mistakes. “Our advisors urged us to diversify away from fertilizer, and we didn’t. We should have created our own brands, and we didn’t act fast enough.” The pressure to meet investor expectations and maintain growth meant that the founders were unable to pivot in time to avoid the impending crisis.
By September 2023, as Kenya’s economy faced mounting challenges, iProcure’s situation had deteriorated to the point where the company could no longer meet payroll. In April 2024, iProcure was officially placed into administration, with KPMG Advisory Services appointed to oversee the process.
“Our customers effectively saved us.”
Despite the formal collapse, the co-founders did not give up. “We lost the company, but the fight didn’t end there,” Carcoforo explained. Even after the business was placed into administration, the team continued to negotiate with the administrators to buy back their technology. The technology, which had been the backbone of iProcure’s operations, was still being used by over 6,000 agro-dealers across Kenya, many of whom continued to rely on it even as the company struggled.
Remarkably, the loyal customer base — agro-dealers who had once balked at paying for the service — became the company’s savior. “Our customers effectively saved us,” Carcoforo said, noting that many agro-dealers began paying subscription fees voluntarily when they learned about the company’s troubles.
Just months after the administration process began, iProcure’s co-founders managed to reacquire their core technology. “That was the best part of the business,” Carcoforo stated. “The commodity side was just a means to monetize the technology, but the technology itself was the real value.”
“It’s all your fault.”
The road ahead for iProcure remains uncertain, but the company’s recent reacquisition of its technology offers a glimmer of hope. With lessons learned from the challenges of over-expansion, reliance on commodities, and external pressures, Carcoforo and his co-founders are focusing on what made the company successful in the first place: its technology.
As Carcoforo concluded, “The moral of the story is that it’s all your fault. You need to own the decisions you make, the good and the bad. But the silver lining is that if you build something of real value, people will stick with you, even in the hardest times.”
While iProcure’s journey has been fraught with challenges, the company’s tenacity and the loyalty of its customers could help steer it toward a new chapter of growth — albeit one tempered by the hard-earned lessons of the past.
Access the full text of Stefano Carcoforo’s insightful story HERE.