Information on the Target

FarmWorks is a Kenya-based agribusiness founded in 2020, dedicated to creating reliable markets for smallholder farmers by aggregating and distributing fresh produce such as tomatoes, onions, and potatoes. With a growing network of 23 branches throughout Nairobi and its surroundings, FarmWorks serves over 12,000 customers monthly, including informal market vendors, retail outlets, and HORECA clients. The company's mission is to improve market access for farmers, thus enhancing their livelihoods and driving profitability.

By empowering farmers with direct access to market channels, FarmWorks addresses a critical challenge in the agricultural sector: the difficulty smallholder farmers face in securing stable markets for their harvests. This approach not only increases the income of smallholder farmers but also contributes to the overall efficiency and sustainability of the agricultural value chain.

Industry Overview in Kenya

The Kenyan agribusiness sector is a vital component of the nation's economy, employing over 40% of the population and contributing approximately one-quarter of the country’s GDP. However, smallholder farmers, who make up a significant portion of agricultural producers, often struggle with inconsistent market access and challenges related to food loss.

Recent years have seen a push towards technology integration in agriculture, with innovations that improve supply chain efficiencies and reduce food wastage. This has heightened the need for reliable off-take channels, which organizations like FarmWorks are successfully fulfilling. Additionally, there is increasing recognition of the vital role agriculture plays in ensuring food security and economic resilience in Kenya, underpinned by government initiatives and foreign investments.

As the agricultural landscape evolves, there is a growing demand for sustainable practices that support climate resilience. This shift presents both challenges and opportunities for agribusinesses. Companies that prioritize technological solutions and sustainable methods stand to gain significant leverage in the marketplace.

Overall, the agribusiness industry is on the rise, supported by a robust demand for food security and sustainable practices that enhance the livelihoods of farmers. Players such as FarmWorks are well-positioned to capitalize on these trends.

The Rationale Behind the Deal

The investment from DOB Equity into FarmWorks is strategically aligned with the goal of enhancing market access for smallholder farmers in Kenya. By providing the necessary funding, FarmWorks is expected to expand its sourcing network, improve its technology platform, and diversify its product offerings.

This partnership not only targets financial returns but also emphasizes social impact by supporting local agribusinesses in their quest for growth. By addressing key gaps in the agricultural value chain, such as market access and technology integration, the deal aims to create a sustainable ecosystem that benefits all stakeholders involved.

Information about the Investor

DOB Equity is a Dutch family-backed impact investor with a focus on fostering inclusive economic growth and addressing environmental sustainability in East Africa. The organization seeks to empower entrepreneurs and businesses that contribute to significant societal advancement, particularly in sectors such as agriculture.

Through its investments, DOB aims to create lasting economic benefits and increase climate resilience, aligning financial returns with positive social outcomes. Their commitment to agribusiness development in Kenya serves to strengthen local economies while promoting sustainable farming practices.

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This investment in FarmWorks is seen as a promising opportunity due to the company's strong market positioning and innovative approach to solving critical challenges faced by smallholder farmers. The focus on technology and efficiency is particularly relevant in today's agricultural context, where food security and waste reduction are paramount.

Moreover, FarmWorks' commitment to empowering women and youth in rural communities not only aligns with modern sustainability trends but also establishes a strong social impact narrative, which resonates with today's investors. The leadership of CEO Yi Li, a strong advocate for sustainable agricultural practices, further enhances investor confidence in the company's strategic direction.

The collaboration between DOB Equity and FarmWorks presents a distinctive value proposition, merging capital investment with shared expertise. This synergy is likely to facilitate accelerated growth and expanded market reach, driving a significant positive impact within the agricultural sector in Kenya.

In conclusion, this deal illustrates a well-rounded approach to investing in agribusiness that leverages technology and addresses social inequalities, making it a potentially lucrative investment while contributing positively to the communities involved.

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