Absa acquires minority stake in agritech start-up, Khula!
In line with its strategic intent to be a digitally powered business that is committed to transformation, Absa Bank has acquired a minority stake in the agritech start-up, Khula! App Pty Ltd.
Through its award-winning app, Khula! has built an ecosystem of three platforms that addresses challenges across the agricultural value chain. This includes a Fresh Produce Marketplace that connects small-scale farmers, commercial farmers or distributors of fresh produce with retail, wholesale and export buyers and an Input Marketplace where farmers can buy products and services (seed, plant health, plant protection and animal health products) from leading industry suppliers.
A Funder Dashboard that connects buyers and sellers to complete orders and payments on the platform and that links farmers in need of funding with potential investors will also be operational in due course.
“Amid efforts to continue building lasting relationships with our stakeholders, we are excited to further cement our relationship with Khula!,” says Faisal Mkhize, Chief Executive for Relationship Banking at Absa Group. “As the biggest financier of agriculture in South Africa, this transaction underscores our commitment to digitisation in a way that improves efficiency and productivity, which can go a long way in making South Africa more competitive.”
“Absa is undoubtedly a leading player in agri-banking, not only in South Africa but on the continent as well,” says Karidas Tshintsholo, Chief Executive Officer at Khula! “The decision to add Absa to our capitalisation table is a very strategic and long-term decision. We are aligned in our interests and how we see the industry transforming over the next few years.”
The transaction marks the continuation of a strategic partnership that started in 2018 and which saw Khula! expand significantly. Since first piloting the solution with roughly 400 farmers, the app has attracted more than 7 000 active users and offers in excess of 5 000 products via its Input Marketplace. Along this journey, Absa and Khula! have collaborated to introduce a standardised payment gateway that are facilitating the transactions on the app. Absa has also supported Khula! with Enterprise Development Funding and has worked closely with its leadership since the company’s inception.
“As Absa Enterprise Development, we are constantly looking for opportunities that will make a positive contribution to South Africa and society,” adds Kglalaletso Tlhoaele, Head of Absa Enterprise Development. “When we initially met with the founding members of Khula! we were amazed at their ideas, energy and commitment to make Khula! work. This made it easy to buy into the vision of Khula! and support them from an Enterprise Development perspective. We are very proud of the progress and growth of the business.”
Abrie Rautenbach, Head of Absa AgriBusiness, says the acquisition will not only enhance Absa’s agriculture proposition for Small and Medium Enterprises (SMEs), but allow Absa the opportunity to further assist with the continued expansion of the Khula! proposition, potentially also into other African markets in which the bank operates.
Khula! won the MTN App of the Year in 2018 and was selected as the winner of the KPMG Private Enterprise Tech Innovator in Africa competition in 2021.