Hope you’re doing well.
Over the next few days, I’ll be migrating hardwarethings.org to its new home. There might be some glitches so bear with me.
Also, I’m looking for teams and people who developed hardware tools and products in response to the COVID-19 pandemic across the continent. If you did or know someone who did, please let me know by simply responding to this email.
Have a good month!
In case you missed it, here’s last month’s newsletter.
When I hear the term “digital agriculture,” it is often about a piece of software technology to improve sales, delivery, or information for people in the agriculture space. It has always struck me that most of these software tools could be hard to scale without a significant investment in hardware, but that the latter piece was more difficult to acquire and startups had to show traction with their software side first in order to get the funding to do so. It appears that might be happening now.
According to AgFunder’s Africa Agrifoodtech Investment Report:
“Over the last five years, Agrifood tech deals have almost tripled from just 51 in 2017 to 150 in 2021. Agrifood Fintech startups that are facilitating financial inclusion for farmers, agribusinesses, food vendors and retailers are also rising as the next biggest category to watch after midstream tech startups, having raised US$ 23.6 million last year.”
Some of these have gone to hardware enterprises. In August, the Digital Agri Hub published an insights report on smart farming solutions (their term for sensor-driven farming powered by IOT connectivity) for smallholder farmers in Low- and Middle-Income Countries. Among the key trends they discuss in the report, they mention that successful smart farming solutions tend to be bundled with e-commerce platforms that connect farmers to suppliers, traders and/or buyers to help them find markets for their increased yields.
They also found that most of these smart farming startups rely on six major business models: Upfront purchase or asset transfer, Pay-as-you-go (PAYG), Smart farming-as-a-service/subscription, Freemium or tiered, Service bundling, Data or insights monetisation. And one provider could use different models to deal with separate customer segments.
Of the six, the companies I find very interesting are those offering data and insights. Usually, they build and manage drones that survey large farm areas and provide these reports to their customers. Managing the drones are non-trivial technical exercises in themselves, with the difficulty in getting a lot of parts into the countries they work in. Some startups are devising recycling methods that produce high quality replacement parts.
I think this is a good time to be in that space. COVID-19 drove a lot of interest in digital agriculture, particularly in East Africa, and with other food security issues on the rise, there is likely to be continuous investor interest.
Dive deeper -> There’s a consortium of African drone entrepreneurs called Africa Goes Digital whose membership range from startups supporting conservation efforts in protected areas, others doing data analytics or helping multinationals monitor infrastructure, real estate development, and oil and gas operations. In some way, they owe their history to the now-defunct Technical Centre for Agricultural and Rural Co-operation, a collaboration between the ACP Group of States and the European Union.
Hitachi is receiving applications for their Smart Mobility & Energy Challenge. They’re looking for startups with a proof of concept for industrial mobility applications.
Deadline: November 6.
The Africa Startup Initiative is receiving applications for their ASIP Accelerator Programme, open to African startups in the Agritech & Supply Chain, IOT & Connectivity, and Clean Tech sectors. The accelerator is particularly targeted at startups looking to scale through corporate and public sector partnerships.
Deadline: November 11.
In Tunisia and Benin, Seabex is developing hardware and software tools for precision irrigation and other agronomy applications. Paired with a crop database, their solution targets growth stages of crops to supply water when needed.
Until next time,
This month’s Community Chat is on Thursday, November 17. Join us!