The Future of African Agrifood Startups: Insights from Sherief Kesseba

Supporting African agrifood startups based solely on their impact is not a sustainable approach, according to Sherief Kesseba, managing partner at Climate Resilient Africa Fund (CRAF). With Africa moving away from reliance on grants and donations, its agrifood ecosystem is rapidly evolving, presenting opportunities with significant growth potential. To attract necessary financing, startups must be commercially viable and appeal to venture capitalists (VCs).

Current Investment Landscape

As it stands, less than 5% of global VC capital is allocated to Africa. While investments in the continent’s agrifood sector are beginning to gain traction, various barriers such as perceived high risk, a limited number of investible projects, and ongoing policy challenges continue to hinder the pace of investment.

Despite these hurdles, many venture capitalists recognize the exponential potential within Africa. The continent is facing an agricultural financing gap that ranges from $75 billion to over $100 billion annually.

CRAF’s Role and Recent Developments

CRAF is focused on supporting early-stage startups that are innovating in food systems, climate solutions, and the broader nature economy. In a recent interview with AgFunderNews, Kesseba elaborated on these emerging dynamics within Africa’s agrifood landscape.

The Ecosystem in 2025: A VC Perspective

AgFunderNews (AFN): How would you describe Africa’s agrifood ecosystem in 2025?

Sherief Kesseba (SK): The previous year was challenging for startup funding. Much of the capital was sourced from development finance institutions (DFIs), which have been pivotal in de-risking investments in the region. For the ecosystem to progress, it is crucial to attract various pools of capital, particularly commercial investments, enabling DFIs to play essential roles with concessional capital. The landscape is shifting; we’re moving beyond generic models from the Global North towards more tailored, sector-specific funds that align better with farmers’ actual needs.

Highlights from CRAF’s Activities in 2025

AFN: What notable activities did CRAF undertake in 2025?

SK: This past year, we made significant investments, including a stake in Winich Farms, a Nigerian agritech firm providing financial services to smallholder farmers. This access to formal credit has dramatically impacted users’ revenue streams, leading to impressive growth. We also supported the Egyptian company Sea Gardener, which has developed an innovative aquarium system to produce and export shellfish—a sector that has previously underperformed despite Egypt’s extensive coastline.

Technological Innovations Driving Investment

AFN: What technological innovations have emerged in 2025 that are positive for VCs?

SK: A significant trend has been new regulations in Europe mandating supply chain accountability regarding traceability and environmental impact. This has catalyzed the emergence of startups like Vais in Egypt, which employs satellite technology to provide actionable insights for farmers.

Future Expectations for Venture Capital in Africa

AFN: What are your expectations for 2026?

SK: The focus will shift towards building small clusters of smallholder farmers to enhance their revenues and access to credit and markets. VCs will increasingly back innovations that address systemic inefficiencies throughout the supply chain, such as logistics and temperature-controlled storage. Furthermore, climate-smart solutions will attract interest as they provide sustainable farming methods that can scale effectively.

Key Factors Influencing VC Decisions

AFN: What fundamentals will guide VCs in supporting African startups?

SK: Founders will remain the critical factor for VCs; they seek entrepreneurs with a clear and compelling vision and who prioritize capital efficiency. Startups must strive for impactful yet sustainable models that demonstrate sound unit economics before scaling further.

The Challenge of High Startup Mortality Rates

AFN: Does the high mortality rate of agrifood startups in Africa raise alarms for VCs?

SK: Yes, the high mortality rates stem from a lack of focus on unit economics. Many startups leverage technology but fail to maintain profitability across the supply chain. Startups must revert to foundational principles to create sustainable models that demonstrate consistent growth while managing margins effectively.