An agriculture-based tech startup is the latest recipient of an undisclosed sum from Safaricom’s Spark Venture Fund.
In a statement, Safaricom’s Chief Executive Bob Collymore said the investment in data analytics firm, FarmDrive, was guided by growing demand for mobile-based technology solutions that enable farmers to access credit.
FarmDrive, started by Rita Kimani and Peris Bosire, provides an alternative credit-scoring model where they use a farmer’s mobile phone usage and M-Pesa details to create credit ratings, which can be used by financiers to gauge suitability for loans.
Ms Kimani described the investment by Safaricom’s Spark Venture Fund as a godsend, saying it will help them expand their innovative model, hire more staff to handle research and analysis.
“We are excited about this investment because it enables us to scale this innovation, score more farmers, unlock more capital and grow the agricultural loan portfolios of our financial institution partners.
‘‘This is all good for the inclusive development of our country,” she said.
Its online platform has since attracted 3,000 farmers who have received Sh13 million in credit from various financiers thereby helping disrupt the traditional conditions of getting loans through to providing a financial background as well as collateral.
The FarmDrive app allows farmers to register their revenues and expenses on Android and text messages that help them build a portfolio which they can used to apply for loans once it is processed by FarmDrive’s credit-scoring algorithm coupled with satellite, agronomic and economic data to determine a farmer’s creditworthiness. FarmDrive has also helped financial institutions to formulate products which fit the needs of smallholder farmers.
In the past Msurvey, a data analytics’ firm that analyses shopping habits using M-Pesa; and Eneza, an educational platform where students pay a small fee to access notes and past exam papers, have benefited from Safaricom’s Spark Venture Fund’s Sh100 million war-chest.
Spark, is a venture capital fund which supports mobile tech-startups via cash injections, business development support and technical assistance leveraging on Safaricom’s unique capabilities, assets and market positioning. Sendy, an on-demand package delivery startup, was the first business to be funded by Spark.
The fund provides a minority equity stake, or a convertible debt, to selected start-ups with an average initial cash injection of between Sh6 million to Sh22 million.