SA agritech start-up Khula! raises R126m in new funding

Local agritech start-up Khula! has raised R126m in new funding from existing funders, and is now looking to external backers to raise more capital.

Over the past decade, technology companies servicing the agriculture sector have done well in attracting investment to their businesses.

In 2020, Cape Town-founded Aerobotics famously raised R100m from Naspers in a $17m (R253m at the time) funding around.

On Monday, Khula! said it had received fresh backing from its existing shareholders — Absa, AECI, E Squared and PepsiCo’s Kgodiso Fund — in a round led by E squared Investments, the first institutional investors in Khula!

Founders Karidas Tshintsholo and Matthew Piper also added contributions to the round. 

This adds to the growing pool of investment the company has garnered since its founding in 2016, including $1.3m in seed funding from local agrochemical company AECI and E Squared Investments in 2020; as well as Absa and PepsiCo backing the company in for an disclosed sum in 2023.

The company, a digital marketplace bringing small- and large-scale farmers together with customers on one platform, is now hoping for further growth from new backers.

“Khula! is now inviting new investors who wish to participate in the second part of the Series A investment round that is due to close by the end of Q2 2025.

“We are looking for strategic investors who are aligned with our mission and can add value beyond financial contributions,” the company said in a statement.

The business, founded in 2016, said the new funds will be used to strengthen its position in the SA agricultural sector and to further its work in supporting farmers to grow their businesses.

The team will also be launching new products to provide greater access for farmers, and setting its sights on new markets.

The agritech company has built an ecosystem of tech platforms and solutions that address challenges and pain points for agriculture players.

This includes an inputs app that connects farmers with agricultural inputs and technical services, as well as a trading platform that connects vetted farmers with leading buyers of their agricultural supplies.

The company has also been working with finance houses to increase lending to smaller and semi-commercial farmers that would normally struggle to receive financing from traditional lenders.

“The Series A is an exciting milestone for us [after] having started a few years ago just loading spinach in the back of a VW polo. It is the culmination of the dedication and incredible work that the Khula! team delivers on a daily basis,” said CEO Tshintsholo.

Khula!’s latest round adds to the growing list of SA tech based companies that have received new backing in recent months. 

In February, CubeSpace, a satellite component manufacturer started at Stellenbosch University, raised R55m of new capital to expand its business, in a funding round led by asset manager Futuregrowth.

Earlier in February, former SAA boss Vuyani Jarana secured more than R400m in new funding for Ilitha Telecommunications, his telecom venture that aims to connect half a million low-income homes to the internet.

In January, Naked Insurance, which uses artificial intelligence (AI) to offer cover for cars, homes and other valuables, said it had raised $38m (about R706m) in a Series B extension funding round.

The SA Venture Capital and Private Equity Association (Savca) released a report n July 2024 showing that capital flows to SA start-ups in 2023 reached R3.28bn, driven by investment into local technology businesses.

gavazam@businesslive.co.za