NIGERIA – Releaf, a raw material procurement & logistics startup, which develops proprietary hardware and software solutions to drive the industrialisation of food processing in Africa, is planning to expand into more crops and additional West African markets after closing its seed round earlier this year.
Releaf was founded in 2017 and took part in the Y Combinator accelerator programme in Silicon Valley the same year, but only started operations in the oil palm space in 2019 and deployed its proprietary technology in January of this year.
“Our hardware increases the availability and quality of raw materials for food factories and our sourcing software connects us directly to over 2,000 smallholder farmers,” said Ikenna Nzewi, who co-founded Releaf alongside Uzo Ayogu and Isaiah Udotong.
Nigeria is the world’s largest oil palm producer from smallholders, with 80 per cent of the local market share. However, palm kernel production rates are low because many farmers still rely on ineffective processes for de-shelling, including the use of rocks and inappropriate hardware.
Ninety per cent of factories are also running at below 50 per cent of their installed capacity due to scarcity of quality raw materials and the capital to purchase them.
Ikenna Nzewi – Co-founder, Releaf
“With that in mind, we act as a bridge between smallholder farmers and food manufacturing companies, providing working capital for farmers to access more palm kernel and equipment, and processing the raw material into factory-grade inputs for vegetable oil factories,” said Nwezi.
“We also work with farmers to improve their monthly income by up to 5x and grow their wealth by enabling them to spend their time on the most profitable aspects of palm production and financing increased local processing capacity.”
The startup closed its seed funding round in Q2 of this year, including investors such as Samurai Incubate and Future Africa, and plans to use the funds to increase uptake, which Nwezi says has been “great” so far.
“We have a network of more than 2,000 smallholder farmers, with around 600 that consistently provide output for offtake. We will continue to explore opportunities to penetrate the market a little further but our focus is on deepening our relationship and the value we create for our most productive smallholder partners, rather than focusing on numbers for the sake of it,” he said.
Nonetheless, Releaf is focused on growth. It plans to expand across West Africa in oil palm and into additional crops for a continental footprint in due course, building a network of decentralised factories that will power the industrialisation of food processing. But how does it monetise?
“After acquiring palm nuts from our network of smallholders, we process them into factory-grade inputs for vegetable oil manufacturers,” said Nwezi.
“These factories typically need to buy in large quantities and high quality, so our quality assurance and volume means that we are able to secure significant orders from manufactures that go on to produce vegetable oil that consumers buy. We’ve experienced double digit growth every month since commencing operations in January and expect to maintain this growth indefinitely.”