AgDevCo, a prominent specialist investor in African agriculture, has announced the launch of AgDevCo Ventures, a new initiative aimed at fostering early-stage agribusinesses across Africa. The £25 million in funding, provided by the UK’s Foreign, Commonwealth, and Development Office (FCDO), marks a significant step in AgDevCo’s efforts to support small and medium-sized enterprises (SMEs) in the agricultural sector, which are often overlooked by private investors due to high risk and costs.
AgDevCo Ventures will initially focus on East Africa, particularly countries where the organization already operates, such as Kenya, Uganda, Tanzania, and Rwanda. Over time, the initiative is expected to expand into other regions, addressing a crucial gap in funding for agri-SMEs in Africa’s “missing middle,” where businesses are too large for microfinance but too small for conventional private equity.
The new investment strategy aims to boost job creation, link smallholder farmers to broader market opportunities, and support the development of commercial agriculture across the continent. With planned investments ranging between £0.75 million and £2.5 million, AgDevCo Ventures will cater to early-stage businesses, many of which are expected to be African and female-owned or led.
AgDevCo’s move into smaller, early-stage investments represents a return to the organization’s roots. Between 2009 and 2017, AgDevCo focused on smaller-scale agricultural businesses before rebalancing its portfolio toward larger investments in more established enterprises. Now, backed by FCDO’s support and driven by AgDevCo’s profitability, the organization is well-positioned to reinvest in early-stage agribusinesses.
AgDevCo CEO, Daniel Hulls, expressed his gratitude for the UK government’s support, noting that this funding would allow the organization to tap into third-party capital. “We are excited about building the Ventures portfolio and expect it to deliver high impact, creating jobs, boosting rural incomes, and nurturing the next generation of African agri-SMEs,” said Hulls.
The funding from FCDO will enable AgDevCo Ventures to attract further capital, with an additional £20 million currently being raised from development finance institutions and family offices. The new subsidiary will be based in Nairobi, drawing on AgDevCo’s network of expertise across Africa to drive its mission of supporting agribusinesses.
AgDevCo’s vision for AgDevCo Ventures aligns with broader goals of promoting climate sustainability in African agriculture. As Lord Collins of Highbury, the UK Minister for Africa, emphasized during the announcement, improving food markets and providing access to finance for agribusinesses will help farmers secure stable incomes, create jobs for youth, and contribute to Africa’s resilience to climate change.
“Without access to funding, no matter the drive and ingenuity, too many businesses can’t get off the ground. That’s why the UK is backing AgDevCo Ventures with over half the funds for this £50 million facility,” said Lord Collins.
AgDevCo’s broader mission is to foster a thriving commercial agriculture sector that benefits both people and the planet. With $280 million under management and $210 million already invested across 38 agribusinesses in 11 sub-Saharan African countries, AgDevCo is dedicated to driving sustainable growth and connecting farmers to markets. The launch of AgDevCo Ventures is a strategic extension of these efforts, with a particular focus on businesses at the early stages of their development.
As operations are expected to begin in early 2025, AgDevCo Ventures is poised to make a significant impact on the agricultural landscape in Africa, providing much-needed financial support to small businesses that have the potential to transform the continent’s food systems.