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Johannesburg-based agritech startup Khula is preparing to open its marketplace that helps small-scale farmers to the public, early next year, after last month securing undisclosed funding from E Squared Investments.
Khula’s business-to-business (B2B) marketplace helps small-scale farmers to bring their products to formal markets, by offering them cost-effective logistics services.
The startup — which is currently running a pilot in Gauteng, Limpopo, North West and Mpumalanga — was founded in 2016 by Matthew Piper and Karidas Tshintsholo (pictured above).
Following the pilot, the startup plans to open its platform to the general public, when it launches next year.
Tshintsholo told Ventureburn last Friday (6 December) that Khula has opted not to disclose how much it raised in its first official funding round. The deal was signed at an event held in Rosebank, Johannesburg on 7 November.
He explained that Khula was more “interested in headlines that focus on its impact”.
Khula has over 3000 small-scale farmers on its platform
“At this point we don’t want to be distracted by the amount of money that we’ve raised. If anything we see it as a means to an end, basically we don’t want to get lost in the sauce,” explained Tshintsholo.
He said that the investment will be used to bankroll its move, from offices in Ormonde, in Johannesburg South to a bigger space north of the city in Fourways, to accommodate Khula’s growing team.
The round will also help Khula to hire more staff. “We’ve tripled our dev team and are still looking for more talented developers and designers to join the team.
“We’ve also increased our on-the-ground sales and farmer development teams. We’ve upgraded our software, and are investing in the product by bringing in top class front-end, back-end and full stack developers,” he added.
R7.5m generated in revenue so far
Prior to this E Squared Investment, the startup has been self-funded.
Tshintsholo said most of the money Khula has raised over the last two and half years has been from operational revenues and profits — which he said total R7.5-million since the inception of the platform.
He explained that the decision to raise funding from Esquared was more of a “strategic move” than a need for investment.
“We want the flexibility to raise future funding rounds in our own board room instead of hopping around from one investor to the next,” said Tshintsholo.
Khula, he said, is looking to raise a Series-A round in about 18-months’ time.
Pilot with over 3000 farmers
Tshintsholo said Khula has over 3000 active farmers on its platform. He added that the startup’s two agronomists vet more than two new farmers every working day.
“We’ve done 10x on our profits from our first year to over R2-million annually, and we’re looking to keep this going post launch as we are sitting on off-take agreements at the moment.
“There’s some major partnerships in the pipeline that we’re working on, which will be properly announced on launch day in 2020,” he added.
He explained that the startup is now focused on preparing for its launch and wants to make sure that “everything is working 110%” and that it ties up its pending major partnerships.
Said Tshintsholo: “Post launch, the biggest thing for us is to scale, quickly and sustainably” .
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Featured image: Khula co-founder Karidas Tshintsholo (Supplied)