Virtual City gets Sh135m loan from US social fund
Posted Sunday, June 3 2012 at 18:28
Virtual City, a local software development firm, has received a Sh135 million ($1.5 million) convertible loan from Acumen Fund for the development of a mobile-based agricultural application to help small-scale farmers market their produce.
The investment represents the latest capital inflows from international investors in the local information technology sector, which is emerging as a key target for venture capitalist firms.
Recently concluded deals include the triple acquisitions by Fanisi Venture Capital Fund in Elris Communications, TKM Maestro and technology enterprise firm Paystream.
Virtual City chief executive John Waibochi said that the investment from the American-based private equity fund would enable small-scale farmers to access information on markets and prices for their produce.
“We are using this technology to improve the livelihoods of the rural smallholder farmers, change the ecosystem for the agricultural processing sector and support local economies,” said Mr Waibochi.
Real time information
Virtual City is the maker of Agrimanagr, a mobile data management service sold to agricultural co-operative societies and processors that tracks pricing, co-ordinates mobile payment to farmers, and facilitates extension services such as veterinary visits and agricultural input management.
Mr Waibochi said that the lower version of Agrimanagr is expected to benefit more than three million users in the next five years, up from the 300,000 that it currently supports.
Virtual City, through the software, also hopes to help small-scale farmers to bypass brokers by getting real time information on markets while creating a pool of agricultural producers who could unite to form co-operatives.
The firm said that the software would help smallholder farmers to increase their earnings by between 40 per cent and 100 per cent through improved access to credit and markets.
“This investment represents another way in which we’re expanding our investment experience across the agricultural sector to learn about what is needed to professionalise smallholder farming,” said Maurice Nduranu, portfolio manager for Acumen Fund in East Africa.
The not-for-profit venture capital fund invests in social projects.