Oikocredit backs climate-resilient food chains
Oikocredit backs Tanzanian agritech firm East Africa Foods to reduce food loss and improve smallholder farmers’ incomes. (Image source: Oikocredit)
Social impact investor Oikocredit has invested in Tanzanian agritech company East Africa Foods (EAF) as part of a funding round worth approximately US$40mn to strengthen climate-resilient food supply chains across East Africa
The investment will support EAF’s expansion, reduce food loss and improve market access and incomes for up to 100,000 smallholder farmers over the coming years.
The funding will help expand EAF’s processing, storage and logistics infrastructure, alongside its digital platform. It will also enable the company to enter new markets and develop more efficient and sustainable connections between farmers and urban retailers.
Oikocredit participated in EAF’s US$26mn Series B equity round, led by the Private Infrastructure Development Group (PIDG) through its equity investment solution, InfraCo, alongside FMO, the Dutch Entrepreneurial Development Bank. Existing shareholders ARAF, Goodwell, Africa Eats and FINCA also reinvested.
The equity round forms part of a broader capital raise of approximately US$40mn, which includes investment from existing shareholders and debt funding from the Schmidt Family Foundation.
EKTA Partners acted as the exclusive financial advisor for the transaction.
Building more resilient food supply chains
In Kenya and Tanzania, up to 40% of food produced is lost before reaching consumers. Much of this loss occurs after harvest because of inadequate aggregation, grading, storage and reliable transport infrastructure. These gaps affect the prices smallholder farmers receive for their produce and the prices urban families pay for food.
East Africa Foods was established to address these challenges by connecting farmers directly with urban retailers through an integrated supply chain. The company currently sources produce from more than 28,000 registered smallholder farmers and provides aggregation, grading, storage, processing and distribution services to more than 10,000 urban retailers.
EAF has reduced food loss by a third across its own network. Its produce reaches consumers under the group’s brands, including Onja and Golden Banana.
With the new investment, EAF plans to strengthen its presence across East Africa while exploring opportunities to enter additional markets. Its long-term ambition is to develop African-owned and African-operated food supply chain infrastructure that can withstand the growing challenges posed by climate change.
Investing in sustainable growth and lasting impact
“At Oikocredit, we believe that building climate-resilient food systems requires investment in the infrastructure that connects farmers to markets efficiently and sustainably. EAF’s integrated aggregation, storage, processing, and distribution platform helps reduce food loss across the value chain, strengthen food security for growing urban populations, and improve the resilience and incomes of smallholder farmers, commented Samuel Kibiri, senior equity officer at Oikocredit.
"By improving supply chain efficiency and creating value across the food system, EAF is well positioned to deliver lasting impact, sustainable growth, and attractive financial returns as it scales across East Africa. We are proud to support EAF on this journey and to invest alongside like-minded partners.”
Elia Timotheo, founder and CEO of East Africa Foods, said, “A third of what our farmers grow never reaches anyone’s table. That is not a farming problem: it is an infrastructure problem, and it is solvable. For the past three years we have been building the layer this market is missing: the sourcing network, the fleet, the storage, and the technology that sit between a smallholder farm and an urban shelf. This investment enables us to further improve and scale this physical and digital infrastructure. We would like to thank our investors for their support in scaling this vital infrastructure.”
Claire Jarratt, PIDG head of investment management for InfraCo, stated, “EAF’s offering aligns well with PIDG’s mandate to deliver inclusive, climate-resilient growth across the countries in which we operate. Strengthening EAF’s presence in Tanzania, and expanding its efficient, data-driven business into Kenya, will enable the company to mobilise future finance into this vital sector, underpinning improved food security across the region.”
Alongside expanding its physical infrastructure, EAF will extend training for smallholder farmers in climate-smart production methods and further develop the digital systems connecting farmers, branches and retailers. Developed in Tanzania, these systems are designed for deployment in new markets as the company expands.
Up to 100,000 smallholder farmers, 45% of them women, are expected to benefit from higher and more predictable incomes and improved climate resilience. Urban retailers are also expected to benefit from improved quality control, product traceability and more reliable access to fresh produce through EAF’s formalised supply chains.
Peter Byrde, director private equity at FMO, said, “Through our partnership with East Africa Foods, we have seen how investments in logistics, storage, processing, and digital solutions can reduce food loss, improve market access, and increase income opportunities for smallholder farmers. That’s why FMO is pleased to support EAF’s next phase of growth as it expands critical supply chain infrastructure across the region, helping to build a more efficient, resilient, and inclusive food system. By demonstrating a scalable and commercially viable model for agri-logistics, we believe EAF can help catalyse greater private sector investment into the sector and pave the way for increased commercial funding in the years ahead.”
