Business Maverick

AGRICULTURE

Absa buys a minority stake in agritech startup, Khula!

Absa buys a minority stake in agritech startup, Khula!
(Images: khula.co.za)

Absa has followed through on its commitment to invest in digital startups with this week’s purchase of a minority stake in agritech startup, Khula!

Khula! has built an ecosystem of three platforms that address challenges across the agricultural value chain via its app.

The platforms include a fresh produce marketplace to connect small-scale farmers, commercial farmers or distributors of fresh produce, with retail, wholesale and export buyers and an input marketplace where farmers can buy products and services such as seed, plant health, plant protection and animal health products from industry suppliers. 

Although the input marketplace initially started as a platform for buying products, it has evolved into an ecosystem that allows funders to load vouchers and farmers to buy products, with delivery included. 

All the farmer has to do is review the supplier’s quote and accept the terms and conditions. Different payment options on the app include Ozow instant EFT, Visa/Mastercard and a proforma invoice.

The third platform is not yet operational but will be a funder dashboard that connects buyers and sellers to complete orders and payments on the platform, and that links farmers in need of funding with potential investors. 

“Amid efforts to continue building lasting relationships with our stakeholders, we are excited to further cement our relationship with Khula!,” says Faisal Mkhize, chief executive for relationship banking at Absa Group. 

“As the biggest financier of agriculture in South Africa, this transaction underscores our commitment to digitisation in a way that improves efficiency and productivity, which can go a long way in making South Africa more competitive.”

Karidas Tshintsholo, chief executive officer of Khula! says the decision to add Absa to the capitalisation table is a strategic and long-term decision. The transaction marks the continuation of a strategic partnership that started in 2018 and has seen Khula! expand significantly. 

Since first piloting the solution with roughly 400 farmers, the app has attracted more than 7,000 active users and offers over 5,000 products via the input marketplace.  

Absa and Khula! have collaborated to introduce a standardised payment gateway that facilitates transactions on the app, and Absa has also supported Khula! with enterprise development funding since the company’s inception. Other investors have included the Land Bank.

Abrie Rautenbach, head of Absa agribusiness, says the acquisition will not only enhance Absa’s agriculture proposition for small and medium enterprises, but also allows Absa the opportunity to further assist with the continued expansion of the Khula! proposition – potentially into other African markets in which the bank operates.

Khula! won the MTN App of the Year in 2018 and was selected as the winner of the KPMG Private Enterprise Tech Innovator in Africa competition in 2021. BM/DM

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