Backing commercially viable sustainable agri-business to grow and scale.

AgDevCo is an impact investor operating exclusively in the African agricultural sector, with a mission to drive sustainable development in rural areas through supporting commercially viable sustainable agri-business. Small Foundation was an early supporter of AgDevCo, providing support for its core operational costs, and maintains a strong relationship with the organisation.

Catalysing growth

AgDevCo was founded in 2009 with a vision to develop the commercial agricultural ecosystem in sub-Saharan Africa. With an initial philanthropic investment of £50,000 from its chairman, AgDevCo incorporated as a not-for-profit distribution organisation with activities in Mozambique, making loans to six start-ups as part of the Beira Agricultural Growth Corridor (BAGC) initiative.

Small Foundation and AgDevCo formed a relationship in 2011, as AgDevCo had begun expanding operations to new countries. “Small Foundation came in when we were underway, but still operating on a shoestring. We had opportunities to attract government funding, but that was very restricted in its use” says Chris Isaac, Chief Investment Officer of AgDevCo, “What was crucial about Small Foundation support was that it was core funding we could use to build the organisation, spend on people, spend on systems.”

With this core support and guidance, AgDevCo grew into a more developed organisation that was able to build a case for larger funding opportunities. AgDevCo continued building connections and leverage, reaching a critical point following the G8 Summit in 2013 by attracting substantial investment from the UK Department for International Development. This enabled AgDevCo to expand its activities, opening offices in more countries and increasing its fund distribution.

“Our purpose is to go places that others are not willing to go” explains Chris “That’s the additionality we provide. If private money is already doing it, we’re not adding anything. We need to be prepared to take risks that others won’t, while also being able to repay investors and leave behind commercially viable businesses.”

Growing impact across countries

As AgDevCo continued to expand it created new initiatives around working capital and developed partnerships with Root Capital and Mastercard Foundation. By 2016 AgDevCo had operations and investments in 8 countries. While preserving its impact-focused approach, AgDevCo also refined their investment strategy in 2017 to bring the company itself into a place of sustainability.

As of 2022, AgDevCo has funds of $280 million under management, with operations in 9 countries and specialist teams providing technical assistance in commercial agriculture; enterprise development; environmental, social and governance considerations; and smallholder development.

As AgDevCo has grown the nature of its investments has evolved. It is now investing in larger scale operations, where investment returns are easier to achieve and impact can be delivered at scale. AgDevCo’s portfolio includes a mix of export driven business and those increasing food security within their regions.

“Looking back over the past 10 years, there has been a mixed picture for growth on the continent” reflects Chris, “The challenges of climate change effects are present and food import bills continue to rise. On the positive, we are seeing a shift in the type of capital available. In the past it was either traditional aid grants or private investment expecting high returns. Now we are seeing more blended finance, with commercial discipline in how that money is used. Hopefully we will see a lot more capital reaching African farming and food processing businesses over the coming decade.”

Transforming industries

An example of the investments AgDevCo makes that are transforming livelihoods is Uzima Chicken. The poultry company sell day old chicks to a network of thousands of small entrepreneurs who go on to sell the birds, known for the hardiness of their breed, in rural areas. Often sold as a premium product in Europe, Uzima products in African markets are commonplace, affordable, and improve household nutrition and incomes.

AgDevCo was Uzima’s first investor as it moved beyond Ethiopia into new markets in Rwanda, then Uganda, and now are backing Uzima into Kenya, Ghana and Ivory Coast. “We have seen Uzima through multiple rounds of investments, and we see them as having the potential to create a pan-African company that is delivering impact as well as a healthy financial return” says Chris.

What we’ve learned

An early partner of Small Foundation, AgDevCo is a key example of the ‘catalytic runway’ we endeavour to achieve with our investments. Providing the right investment at the right time and in the right way supported AgDevCo’s development of core capacities, and drew on the knowledge and skills of our team.

As AgDevCo has grown, Small Foundation’s role has shifted to that of a peer and ally within a growing ecosystem.

Spotlighting change

“When Small Foundation invested in us we probably had no more than $5 million to work with. Today that is over $280 million, and I hope that when we fast forward to 2030 that will be $500 million under management, that opportunity is there for us. They catalysed us, and through that we are catalysing businesses that have the potential to reach significant scale and deliver impact at scale.”