Ask any founder in African AgTech, “What are investors looking for?” and you will see a mix of anxiety, speculation, and cautious optimism. It is a question that sparks endless theories, sweeping assumptions, and a fair share of myths: “Investors only want quick returns,” “Smallholder farmers are too risky,” or “Once farmers are onboarded, they stay active.” Yet, as the ecosystem matures, reality is proving far more nuanced, and more exciting than these conventional narratives.
While some investors do prioritize fast returns, a growing number of patient, impact-driven funders are taking a long view, focusing on sustainability, resilience, and measurable value for farmers. Smallholders may carry risk, but it is manageable. Bundled solutions, credit, insurance, and advisory, combined with robust data, alternative credit scoring, and strategic partnerships to reduce risk and create viable opportunities for returns. Adoption is never the finish line: continuous engagement, feedback-driven iteration, and real value are essential to ensure active usage and sustained impact.
Over the past three years, investor expectations have shifted drastically. The era of chasing bold visions and speculative tech has given way to a more grounded approach: investors now demand evidence that a startup can move from pilot to reliable revenue, while delivering measurable impact to farmers and value-chain partners. This shift is not just anecdotal, AgBase’s analysis of African AgTech reveals that more than $1.56 billion has been raised across nearly 700 deals between 2014 and Q3 2024, involving around 400 active companies (AgBase). Deal counts remain relatively stable, but funding volumes have softened, and commercial investors are more discerning, signaling a new era of rigor (Briter Insights 2024).
This evolving reality was front and center at the 9th AgriFin Annual Learning Event, where a bold experiment gave attendees a rare, unfiltered glimpse into investor thinking: a reverse pitching session, where investors pitched themselves to the audience, explaining what they truly look for in AgTech ventures.
The session featured six prominent investor voices:
- Eugene Gikonyo, Investment Principal, Mercy Corps Ventures
- Fred Kiio, Associate Director – Agribusiness, Africa Enterprise Challenge Fund (AECF)
- John Kavilu, Senior Manager – Impact Finance Lead
- Mwombeki Baregu, Investment Officer, International Finance Corporation (IFC)
- Larissa Shraydner, Innovation Manager, IDH
- Philip Muturi, Head of Ecosystem Business, NCBA Group
Hearing investors pitch to entrepreneurs flipped the usual narrative, highlighting the true priorities, frustrations, and deal-breakers that founders rarely get to hear firsthand.
A clear theme emerged: clarity of problem–solution fit is non-negotiable. Investors are drawn to ventures that deeply understand the pain points of their target users, whether smallholders, cooperatives, or agribusinesses, and design solutions tailored to those needs. This is especially important in Kenya, where only 20–30% of farmers adopt digital agricultural technologies (KIPPRA, 2022). Solutions that don’t match user behavior, incentives, or context simply will not stick.
The session also revealed the persistent communication gap between founders and investors. Many entrepreneurs tell emotionally compelling stories but fail to back them with operational data and credible metrics. Investors sometimes communicate in financial jargon that alienates early-stage innovators. John Kavilu from KPMG emphasized the importance of investment readiness, urging entrepreneurs to strengthen record-keeping, governance, and reporting systems before seeking capital. He observed that many startups fail not from lack of innovation but from weak governance and poor documentation. Donor-backed initiatives from organizations like KPMG provide technical advisory and investor readiness support to address these gaps, helping startups become more bankable and credible.
Traction and verifiable impact data were also repeatedly emphasized. Investors want to see numbers that tell a story of growth, learning, and measurable improvement, whether through steady revenue, repeat customers, increased yields, or reduced transaction costs. One participant remarked, “Data isn’t just for donor reporting; it’s our evidence for de-risking.” To meet this need, Mercy Corps AgriFin, in partnership with Briter and 60 Decibels, launched the AgriFin Standardized Impact Tool, which offers a consistent, comparable framework for measuring impact across AgriTech ventures, integrating end-user impact and organizational metrics (Mercy Corps AgriFin).
Leadership and governance also dominated the discussion. Investors repeatedly emphasized that capable, ethical, and adaptable teams are the single greatest predictor of whether capital will catalyze transformation. Poor governance, weak financial documentation, and lack of operational discipline are major barriers to funding, even for highly innovative ventures.
The session highlighted the unique risk landscape of African agriculture. Currency fluctuations, fragmented markets, unpredictable policies, and infrastructure gaps often drive volatility more than entrepreneurial failure. To navigate these uncertainties, investors increasingly rely on partnership-based due diligence, collaborating with development organizations, accelerators, and research bodies to triangulate data and reduce risk.
Patient and blended capital are essential. Unlike typical tech sectors, agriculture moves slowly but produces structural enduring returns. AgBase’s State of the Sector 2024 shows that while equity still dominates at 61% of AgTech funding, this is down from 80%, with blended finance, convertibles, and bonds increasingly filling the gap (Briter Insights 2024). Fred Kiio from AECF illustrated how milestone-driven grants and zero-interest loans unlock growth for high-impact agribusinesses, ensuring commercial viability while delivering tangible benefits for smallholder farmers and marginalized communities.
Scalability remains a decisive factor. Investors are drawn to ventures that demonstrate replicability across geographies or value chains without diluting the value proposition. IFC’s Mwombeki Baregu emphasized that their minimum investment ticket sizes are substantial, focusing on companies that already have proven models. He also stressed the importance of exit strategies, a step many AgTech founders overlook entirely. Understanding whether a business is a fintech, agtech, or disruptive tech, and knowing the client base and unit economics, will topple the stakes at the table.
The conversation reinforced a vital insight: investors invest in networks, not just companies. Ventures that can navigate and collaborate within the broader ecosystem, working effectively with input suppliers, off-takers, banks, telcos, and government actors stand out. One investor remarked, “We invest in networks, not nodes.”
The takeaway is unmistakable. Myths are fading. African AgTech is investable, but only for founders who can deliver real solutions, measurable impact, credible governance, and scalable models. The expectations are sharper than ever, and those ready to meet them are positioned for long-term success.
The reverse pitching session at the AgriFin Annual Learning Event did not just offer insights; it pulled back the curtain on the investor’s mindset, reminding entrepreneurs that the path to funding requires clarity, credibility, and strategic vision. For those who take note, the opportunities are enormous, and the ecosystem is ripe for those who can play the game by the real rules.
As Mercy Corps AgriFin, we continue to work closely with AgriFin tech enablers and AgTech startups across Kenya, Tanzania, Zambia, Ethiopia, Uganda, and Nigeria to ensure innovative solutions reach smallholder farmers effectively. Through our AgriFin Digital Farmer (ADF2) program, we support high-impact bundles of digitally enabled products and services designed to increase income, productivity, and resilience, with a focus on reaching at least 40% women smallholder farmers. Our programming integrates climate-smart and gender-transformational approaches, supporting farmers across diverse value chains, many of whom manage multiple crops for both home consumption and sale. Partnering with AgriFin tech enablers and startups, we help de-risk investment, scale innovations sustainably, and deliver measurable impact across the African agricultural ecosystem.
Research & References:
- AgBase, African AgTech Landscape Analysis, 2024 – https://www.agbase.co.ke
- Briter Insights, State of AgTech Investment in Africa 2024 – https://www.briter.co/insights/reports/state-of-agtech-investment-in-africa-2024#:~:text=While%20the%20majority,and%20blended%20finance