Tanzanian agri-tech startup Kilimo Fresh, a digital distributor of fresh produce to hotels, restaurants, supermarkets, institutions, wholesalers and export markets, was in August named winner of the MEST Africa Challenge, winning US$50,000 in equity investment.
Kilimo Fresh is a B2B produce distribution platform that connects smallholder farmers and produce buyers to a fair and reliable market, enabling buyers to access better-quality and fresh produce directly from farms at affordable prices, and have it delivered directly to their locations.
The solution gives consumers access to a simple online ordering platform through which they can purchase fresh produce, and provides farmers with stable pricing and direct access to the market for their crops, also eliminating food waste.
Winning the MEST Africa Challenge, which is run by pan-African training programme, seed fund, incubator and hub MEST Africa and saw Kilimo Fresh beat off competition from startups from Ethiopia, Kenya, Ivory Coast, Rwanda, Ghana, Senegal, Nigeria and South Africa is a major landmark for the startup, whose journey began in 2015 when co-founders Baraka Jeremiah and Justice Mangu graduated from university.
“Due to a common interest, we went into farming, we were growing tomatoes, capsicums, and watermelons, and we would sell to middlemen who would sell to a wholesaler in Dar es Salaam,” Jeremiah said.
“During this time we faced major frustrations as a result of low margins, lack of market information, and demand visibility, as well as a lot of food waste. Because of this, we formed Kilimo Fresh in 2018 to help solve this problem for other farmers in Tanzania.”
Farmers in Tanzania, it turns out, lose more than 40 per cent of the food they produce before it reaches the market, due to factors such as poor farming practices, lack of storage, and a highly fractured trading system.
“Produce that makes it to market passes through a number of middlemen, who increase the price significantly. When a product reaches a consumer, it costs more than what was initially paid to the farmer. These problems extend to the markets, where farmers would let their products go to waste for the inability to store for a longer period and access the market,” said Jeremiah.
The startup was initially bootstrapped from personal savings, friends, and families, which gave it a little runway until it was able to acquire customers and cover operational costs. It is now ready to grow, with the MEST money in the bank and Kilimo Fresh having also raised US$30,000 from the Seedstars Tanzania Accelerator in December of last year.
“We’re still looking forward to raising US$200,000 before February 2021,” Jeremiah said.
The company currently operates in two regions in Tanzania, Dar es Salaam and Dodoma, supplying them with their daily needs of fruits, vegetables, and grains. Plans are in place to expand operations to Zanzibar and Arusha, as well as other East African countries, especially Rwanda.