RELEAF OFFERS RELIEF TO NIGERIA’S OIL PALM FARMERS AS IT SECURES $4.5M IN FUNDING
Nigerian food processing startup Releaf focused on the oil palm sector has raised $2.7 million in seed funding and has also attracted a further $1.5 million in grants.
Started by two Americans of Nigerian descent, Ikenna Nzewi and Uzoma Ayogu, Releaf secured the seed funding from interests based in Nigeria, Mauritius, Japan and the United States.
The grants awarded to Releaf have come from the United States Agency for International Development (USAID) and the Challenge Fund for Youth Employment, which is run by The Netherlands’ foreign ministry.
By using its own crushing technology, Kraken, Releaf, which was set up four years ago, says it can produce higher quality palm oil from the oil palm nuts it purchases from small farmers.
Reports indicate the company’s method leads to lower levels of impurities in the palm oil, which could allow the firm to charge higher prices to purchasers, which include fast-moving consumer goods manufacturers.
Small farmers are said to account for four-fifths of Nigeria’s multi-billion dollar oil palm industry, but they reportedly struggle to access efficient processing methods.
Analysts have said it may be a challenge for Releaf to break into a highly competitive market, but the firm hopes its technology, and the better-quality palm oil it produces, will differentiate it from other operators.
Nigeria is set to significantly increase palm oil production, with the total acreage likely to grow to 6 million hectares by 2027, double the figure of two years ago.
Among the African-focused food industry startups to have also generated significant interest from investors is the ready-to-eat meals delivery service Kune, which recently raised $1 million in pre-seed funding.