“We can laugh about it now” ThriveAgric’s Uka Eje on how the company survived the COVID-19 troubles

Godfrey Elimian

Uka Eje is the founder and CEO of ThriveAgric, a fast-growing agricultural tech company committed to ensuring food security by linking farmers to capital, data-driven best practices and access to local and global markets for their commodities.

Founded by Uka Eje (CEO) and Ayodeji Arikawe (CTO) in 2017, ThriveAgric started as an agricultural technology startup that provided access to finance, premium markets, and data-driven advisory for smallholder farmers. It financed agriculture projects through crowdfunding.

In the space of 3 years, ThriveAgric had grown to become a notable African Agritech startup, with backing from Y Combinator—one of the world’s most successful startup accelerators—in 2019.

But not only that the company supports farmers, but it also gives individuals the opportunity to invest in agriculture without having to own a farm, land, or pre-existing knowledge of agricultural processes while empowering smallholder farmers to leverage its technology to access finance and improve productivity and sales to promote food security.

However, for the founder of AgricTech, things haven’t always been rosy. As the founder of one of the most well-known agribusinesses to come out of Africa, Uka has risen above and overcome the various challenges thrown at him, including having to deal with investor backlash during the covid-19 pandemic for failure to meet payouts and having seen most of his products go to waste due to the restrictions of that phase.

In a conversation with Technext, he details how the company navigated the COVID-19 pandemic and its effects on the company. How the employees stuck together and spoke to all the investors and the role of Adia Sowho in restructuring the company so that it can withstand future challenges could make up a book.

Uka Eje, CEO and co-founder of ThriveAgric
Uka Eje, CEO and co-founder of ThriveAgric

In fact, in 2020, Uka had to step down from his role as the CEO in the interim while bringing in Adia Sowho, who helped navigate the business out of a perilous time. Since then, the company has surged in business operations, now successfully operating in 26 states of the country, helping to provide the majority of the crops used in households in Nigeria today.

Read also: Remedial Health’s Samuel Okwuada is saving African lives by reshaping the pharmaceutical industry

ThriveAgric’s onboarding process for farmers

According to Uka, ThriveAgric’s model gives smallholder farmers access to finance, technology-base advisory and access to the market. But to do that, they group these farmers into clusters or mini-cooperatives to serve as cross-guarantee to themselves and administer them through contract field agents.

Godfrey and Uka Eje

In the process of onboarding farmers, which actively started in 2017, we work with community agents on the field largely on contracts. We have about 1800 of them on the field. These agents work with the farmers and put the farmers in clusters or mini-cooperatives. These cooperatives are what we use through the agents to administer the loans and credits to the farmers.

So we don’t give them cash; we give them input financing. These clusters of farmers managed by the contract staff cross-guarantee themselves because of the nature of the loans we give. Also, to get updates, we built something called the agricultural operating system (AOS). The AOS gives updates on every activity of the farmer, from when the farmer was onboarded to farm mapping to all the operational activity of the farmer to when harvest starts.

All input administered is captured through the AOS, and that’s how we get to know the progress of every former on the platform. At the moment, we have been able to onboard half a million smallholder farmers in Nigeria. Although the progress is quite rigorous, we currently cover 2700 communities.

The numbers so far

For Uka, the company has made significant strides from what it was some years ago when it launched. In fact, in 2017/2018, when the company just started onboarding farmers into the platform, he claims the company was working with less than 1000 farmers. But the company since then, the company has expanded to about 400,000 farmers currently.

In the year we were in our Google launch pad and YC program in 2019, because scaling was the objective for us at the time, we grew to about 5000 farmers. At that point in 2019 we crossed about 10,000 farmers, and even though we witnessed a slight decline during the covid era, the number of farmers we had on our platform had increased to about 50,000 at the time.

In 2021, we slightly increased to about 120,000, but that was against the scale we were working with based on our growing momentum. In 2022, we grew from that number to about 500,000 farmers currently.

He claims how these numbers translate into revenue is based on the model the company runs, which involves “charging an onboarding fee for every farmer on the platform who gets loans. We have been able to grow revenue by 50% year-on-year.”

Regarding coverage, Uka says the company is currently represented in 26 states in the country. However, a major reason why the farmers represented on its platform is not evenly distributed across the 6 geo-political zone in Nigeria is due to the type of crops they focus on. “At the moment we are currently working with farmers who plat=nt rice, maize, millet, and sorghum”, he says.

Uka Eje of ThriveAgric with Godfrey Elimian

A major challenge in the industry

There is no doubting the huge potential of the agric sector in Africa, particularly in Nigeria, where it continues to be the major contributor to the nation’s GDP. However, the sector has been battling with several challenges that have limited its potential to become a major sustainer of food security for the continent.

For Uka, the major challenge he has dealt with as a founder is getting the right financing and access to capital.

The reason why the right kind of financing is important is that, when there is the access to it, Africa will not just be able to satisfy its needs for food, but would be able to export to the rest of the world. Africa has that kind of potentials.

Uka referred to a time at the initial stage of the company when they had to source for funds to leverage on an opportunity to get some crops, but due to no access to the right kind of funding, had to knock at the doors of families, friends and schoolmates. And although they established a model for the company based on that source of funding which was crowdfunding, he described it as an “impatient capital” to work with, which is not so healthy for that type of business,

He adds that another problem can be that of “fragmentation in the agric sector, which technology can solve. There are many players everywhere in the sector, the banks want to understand the industry enough to solve, the insurance companies want to understand the industry enough to finance, and everything is just scattered in bits.

What technology can do is bring everybody into one space to relate with themselves. The farmers need to have a credit history enough to be financed. Most of these farmers are unbanked yet they bring about the bulk of the food households eat. So both the banks, the insurance companies and the farmers should be able to interact for the right financing to come to the sector.”

Uka Eje

How did the company survive the Covid-19 period?

Due to the severe business lockdown brought on by the COVID-19 epidemic in 2020, several businesses experienced a sharp decline in their profits and revenues. Although there was a restriction on movement, it was tougher for ThriveAgric because their business model relied heavily on mobility.

In 2020, we were not immune to the impact of the lockdown that happened because of covid, especially because at that time, we were more involved in poultry farming. So these farmers were expecting us to deliver poultry feeds constantly and we had invested a lot of money with these poultry farmers.

Because of the lockdown at the time, we noticed it was slow moving these feeds. And because these were broiler birds, they couldn’t withstand the delay, and some died. For the ones that survived, because of the nature of our operation, it was not one in which the farmers could afford cold storage facilities.

Uka Eje explains more the major cause of the revenue decline and payout crisis the company encountered and how they had to make sacrifices, take drastic decisions and make new strategies to bring the company out of the situation at that time.

Watch the complete interview here:

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