Ugandan agritech startup, Emata, has received $2.4 million in seed funding, comprising $800,000 in equity and $1.6 million in on-lending capital, to expand its agri-loan offerings across East Africa.
The expansion will include Uganda and an impending international venture, with Tanzania being the most likely destination.
African Renaissance Partners led the round with participation from several investors, including Norrsken Accelerator, Zephyr Acorn, Marcus Boström, and Draper Richards Kaplan Foundation.
Founded in 2020, Emata collaborates with farming cooperatives to give farmers easy access to digital financing. It uses alternative credit scores based on data points like a farmer's delivery history instead of conventional collateral requirements.
Emata helps farmers increase productivity by addressing farmers' access to funding as a company that partners with cooperatives and farmer-based organisations to fully digitise the lending process and incorporate it into the agricultural value chain.
Its partners deduct loan payments on its behalf, so these partnerships guarantee access to a direct source of repayment.
Emata reached over 40,000 individual farmers in 2022 after growing seven times year over year and forging alliances with 50 agricultural stakeholders. It has disbursed $1 million in loans.
The startup will prioritise growing its core markets, particularly those in the dairy and coffee industries. This business, however, has its sights set on oilseeds, maize, and the opportunity to diversify into potatoes.