Farmsponsor’s CEO Explains why some Nigerian Agritech Startups Struggled in 2020

Quite a number of Nigerian agritech startups were pummeled in 2020 by the negative economic situation and prevalent uncertainties in the country. This came as a rude shock to many Nigerians who invested in these startups through their crowdfunding investment options. As it was widely reported, the likes of Thrive Agric struggled to repay investors as at when due. The struggling startups all blamed the COVID-19 pandemic for the delay.

The good thing, however, is the fact that not all agritech startup struggled last year. A number of them that also adopt the crowdfunding strategy carried on with business as usual and even paid investors when they were supposed to. One of them is Port Harcourt-based Farmsponsor.

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Earlier this week, Business Elites Africa spoke to the company’s Founder and Chief Executive Officer, Mr Bill Kenneths. We asked him numerous questions about Farmsponsor and the agritech ecosystem in general, and his full responses will be featured in our upcoming magazine edition: African Brands that will Shape 2021. In the meantime, something he said about why some agritech startups struggled last year struck a chord. And we couldn’t wait to share it with you.

See Bill Kenneths’ explanation below:

 They call it agritech, but agriculture is physical. Tehcnology in agriculture is supposed to enable you do the physical things a lot more seamlessly, you know. So, if you are saying you are in agritech but you don’t have any physical and tangible investments, when the rainy day comes it will just hit you so hard. 

We at Farmsponsor didn’t see the pandemic coming. But we already prepared ourselves for any eventuality, which is why we have always been investing in real assets. What are these real assets? Okay, I’m in poultry business today; what are those things that aid my business operations? How can I tap into them so I can reduce my cost of operation? So, that is what we did, and we started investing in those key areas that will facilitate our operations.

When you are an agritech startup specialising in maize farming, but you don’t have a farm of your own although you have farmers who partner with you, you don’t have control. Let’s imagine that anything happens, like the Coronavirus, everybody is affected; including the farmers partnering with you. So, even if a farmer wants to be very sincere with you, his children are hungry at home. Now, he has corn in his farm which do not technically belong to him. What do you think he will do? Of course, he will go there and harvest the corn to feed his hungry family. I mean, it’s his farmland and he can easily go there and nobody will question him. Moreover, when life happens to you, the first thing is to survive first. 

That is just to buttress the fact that if you are doing business but you don’t have control over what you send out, you are not really in business yet. But if you are in business and you have control over what you send out and what you bring in, honestly the sky is your limit. That is one thing I know helped us a lot. 

Consider this: during the lockdown they said no more movements but only permitted essential workers such as those in agriculture, doctors, eCommerce and more. Now, if you are doing corn business or even poultry like us, but you don’t own a vehicle that can transport your farm produce, how do you want to do it? Remember, they did not say that transporters can move. It was a lockdown, which meant that nobody was allowed to travel anywhere. So, you can’t get any transporters. Even if you do, the transporter would need a permit which he may not be able to get. But assuming you owned a vehicle prior to the lockdown, you won’t have any problem with transporting your produce. The government already exempted you from the lockdown. So, you just move freely and deliver your produce to your customers because people will still eat, whether there is a pandemic or not…

EDITOR’S NOTE: Read the rest of the interview on page 22 of our latest magazine edition: 54 Entrepreneurs and Brands to Watch in 2021.