ThriveAgric, the Y Combinator-backed Nigerian agritech startup, has raised ₦5.3 billion ($3.93 million) in the first series of a commercial paper programme that could grow to ₦50 billion ($37.09 million), extending a debt-heavy funding strategy its chief executive officer Uka Eje says is better suited for its business operations.
The Series 1 issuance, announced on Tuesday during the signing ceremony and media briefing with journalists in Lagos, Nigeria, was oversubscribed after attracting institutional demand above its initial ₦5 billion ($3.7 million) target, the company said.
The move marks ThriveAgric’s first foray into Nigeria’s debt capital markets and opens another channel beyond bank lending for a company whose core challenge has long been access to the right kind of capital.
“Securing [Nigerian] SEC approval for our ₦50 billion CP [commercial paper] programme and completing this oversubscribed ₦5 billion Series 1 raise validates our disciplined approach to corporate governance and capital management,” Eje said. “Beyond the numbers, this institutional backing provides us with the financial flexibility to scale our operations, deepen our outgrower networks, and ensure prompt off-take for smallholder farmers.”
The commercial paper will fund a different part of the business, not agricultural production, which can take nine to 12 months, Eje said. It will provide working capital for ThriveAgric to buy produce from smallholder farmers through its network, aggregate the commodities, and supply them to off-takers, including food processors and fast-moving consumer goods (FMCG) companies.
ThriveAgric finances farmers to produce crops and then helps connect their harvests to buyers. A farmer who receives financing for inputs can use part of the harvest to repay the loan and sell the rest as surplus. ThriveAgric collects and aggregates the produce through its network before selling it to buyers.
The new commercial paper will fund this part of the business, providing the capital needed to buy produce from farmers and supply it to off-takers. It also gives farmers a ready market for their crops, a gap Eje said remains a major problem for many smallholder farmers.
The ₦50 billion ($37.09 million) raise could give the company much more of that firepower. Eje said ThriveAgric expects to make further commercial paper issuances as it works to complete the raise over the next 12 months.
“This is why it’s not equity; it is debt to expand our business in Nigeria,” Eje said. “Coming to the capital markets like this gives [an] opportunity for cheaper debt that is conducive, I think, for the sector, or I would rather say more conducive for the sector. The reason why we’re taking this step is because financing can be attractive. Agriculture is scalable when financing is attractive, and it’s a lot more sustainable.”
The proceeds from the debt raise will help scale agricultural trading across ThriveAgric’s operating hubs, according to the company.
