ThriveAgric secures ₦5.3 billion to expand its agricultural trading business

Nigerian agritech company ThriveAgric has raised ₦5.3 billion ($3.93 million) through a commercial paper sale, giving it more money to buy crops from smallholder farmers and sell them to larger food businesses. The company had planned to raise ₦5 billion in the first series but received more interest from investors than expected. The deal is the first issuance under a ₦50 billion commercial paper programme approved by Nigeria’s Securities and Exchange Commission. For ThriveAgric, this is not about launching another product or moving into another country. The money is going into the part of its business that deals with what happens after farmers harvest their crops. ThriveAgric buys produce from farmers, gathers it from different locations and sells it to food processors and fast-moving consumer goods companies. That requires a lot of cash. The company has to pay farmers when it buys their produce, while payment from larger buyers comes later. As the amount of produce increases, so does the amount of working capital needed to keep the business moving. The new funding gives ThriveAgric more room to do that.

Why ThriveAgric is raising debt

ThriveAgric CEO and co-founder Uka Eje said the company chose debt because it fits the trading side of its business better than equity. Financing a farmer from planting through to harvest can take nine to 12 months. Buying harvested produce and selling it to an established buyer is a much shorter process. That means ThriveAgric can borrow money, use it to buy produce and then put the money back into the business once that produce has been sold. “This is why it’s not equity; it is debt to expand our business in Nigeria,” Eje said. Eje also said the company secured the debt at a rate that was more suitable for the agriculture sector. The commercial paper programme gives ThriveAgric room to raise more money over the next year. The company expects to make further issuances as it needs additional working capital. The full programme is worth up to ₦50 billion.

Nigeria remains the focus

ThriveAgric operates in Nigeria, Ghana, Kenya, Uganda and Rwanda. But Nigeria remains by far its biggest market, accounting for about 90% of its business, according to Eje. The latest funding is therefore not being used to open more offices or enter another African market. The company wants to grow its existing operations in Nigeria, particularly its agricultural aggregation and trading business. That means working with more farmers, buying more produce and supplying more of it to established buyers. The commercial paper also gives ThriveAgric another source of debt beyond traditional bank lending. The company raised $56.4 million in debt in 2022 from local commercial banks and institutional investors. It also received a $1.75 million co-investment grant from the USAID-funded West Africa Trade & Investment Hub. This time, the company has gone directly to Nigeria’s debt capital markets. Anchoria Advisory Services was the lead issuing house for the transaction. BAS Capital, Mulberry, FCMB Capital Markets and FCSL were also involved.

ThriveAgric already has a large farmer network

ThriveAgric was founded in 2017 by Eje and Ayodeji Arikawe. The company says it now works with more than 1.3 million smallholder farmers across 26 Nigerian states and has around 5,000 field agents. Those agents work in farming communities and help ThriveAgric collect information about farmers, their farms and their activities. The company uses its Agricultural Operating System to manage the information, as well as activities such as input distribution, field monitoring and inventory management. That data could eventually help farmers access more credit. Eje said ThriveAgric is working towards allowing financial institutions in its network to use information from its platform when assessing farmers for loans. For farmers without much formal credit history, records showing their farming activity and previous transactions could give lenders more information when deciding whether to lend. But the immediate use of the new funding is more straightforward. ThriveAgric wants to buy more produce.

The problem is not only growing the food

For many smallholder farmers, getting a crop out of the ground is only part of the job. Once the harvest comes in, they still need a buyer. Large food processors have a different problem. They need large and reliable supplies of agricultural products, but sourcing directly from thousands of small farmers can be difficult. ThriveAgric operates between the two. It provides financing and support to farmers, buys their produce after harvest, aggregates it and sells it to larger businesses.

That model depends heavily on working capital. If ThriveAgric has more money available, it can potentially buy from more farmers when their crops are ready and supply larger volumes to its buyers. The company has grown quickly. Its revenue increased from $8.1 million in 2019 to $73.26 million in 2022, and it was included in the Financial Times’ ranking of Africa’s fastest-growing companies in 2024. Eje did not disclose the company’s current revenue. According to Crunchbase, ThriveAgric has raised about $61.3 million in total funding. The latest ₦5.3 billion raise gives the company another pool of money to put into the same business it has been building for years. The test now is fairly simple: can ThriveAgric use the money to buy more produce, sell it to buyers and get that cash back into the business quickly enough to keep the cycle going?