Egyptian agtech startup Mozare3 has raised over $1 million dollars in a pre-seed round led by Algebra Ventures and Disruptech, it told MENAbytes today. The round also included the participation of EFG-EV and some angel investors.
Founded in 2020 by Hussein Abou Bakr and Tamer El-Raghy, Mozare3 aims to serve over 20 million small farmers in Egypt by providing them with access to markets and credit. It also aims to build the first digital community for farmers of Egypt to offer them agronomy support through its network of subject matter experts.
Mozare3 helps farmers sell their crops by working with insitituional buyers like processors of frozen vegetable and large wholesalers and retailers. It signs offtake agreements with the farmers to purchase their produce’s future output at a certain price for the institutional buyer. It helps farmers reduce the risk of not being able to find a buyer when the crop is ready to be sold but more importantly focus on doing what they do the best; farming and leave the rest to to Mozare3.
Hussein Abou Bakr, the co-founder and CEO of Mozare3 – who comes with 20 years of experience in small-scale and commercial farming, food processing, and international trading – told MENAbytes that they currently have 100 farmers who they have offtake agreements with, and three large institituonal buyers. Most of what Mozare3 does is being done offline today but they’ve been testing their app through a private beta with a small group of farmers. The public launch of the app that will enables farmers to sell their future produce through digital offtake agreements, access credit, receive agronomy support and buy fertilizers and other products to grow crops.
“We aim to grow our network of farmers [who we have offtake agreements with] to up to 2,500 and have between 25 to 50 insititutional buyers by the end of 2022. Mozare3’s app will also serve farmers who we don’t have offtake agreements with by helping them buy different types of products and receive online support from our in-house experts. We’re hoping to reach 10,000 farmers within the next eighteen months with the app,” stated Hussein in a conversation with MENAbytes. Prior to starting Mozare3, he had also founded an agri processor and exporter Plantform that used to source produce from smallholders in over 10 governorates in Egypt
Mozare3 aims to roll out multiple fintech offerings for the farmers but what it has started with is working capital in form of down payments for offtake agreements. The farmers who sign offtake agreements receive a part of the total consideration for the future output at the beginning of the crop period to cover their initial expenses. The Egyptains startup also plans to launch credit solutions to finance purchases of different products (e.g. appliances, motorbike, etc.) for farmers and their families. Interestingly, for now Mozare3 is financing the loans from its own books but plans to raise venture debt in the future for it.
Tamer El-Raghy, co-founder of Mozare3, commetning on the ocassion, said, “While the agri sector contributes more than 10% of the GDP and 25% of national employment, farmland [in Egypt] is very fragmented with more than 40% of the farms with an area of less than 1 acre. This fragmentation represents an opportunity for an agri-fintech platform, like Mozare3, to bring efficiencies to the supply side, by providing those farmers with innovative financial products, agronomy support and access to markets, and hence turn those farmers into contract-farmers, in order to fulfil the growing demand of consumers, processors and exporters.”
He is also the Managing Director of Acument Capital Partners, an agri VC in Africa – and has been investing in the agricultural and food industry of Africa for over 10 years.
Tarek Assaad, Managing Partner at Algebra Ventures, said,” The agriculture industry suffers from price opaqueness, supply fragmentation and high levels of fraud, to name a few of the challenges. We believe that it is one of the segments of the Egyptian economy that can benefit the most from tech efficiencies. We had been looking at making an agritech investment for some time and are delighted to support Hussein and Tamer as they address this massive opportunity. We were impressed by the vision, capabilities and passion of the Mozare3 team, and we are excited to be part of their journey.”
Mohamed Okasha, Managing Partner at Disruptech said, “[We are] very excited to lead this round for Mozare3 – a large, underserved segment and very experienced management team. We have been working closely with Mozare3 founding team since a year to launch the first agri-fintech company in Egypt. We are very confident that Mozare3 will digitally transform this market and enable farmers access to finance and market information in a very innovative way.”
Mozare3 plans to use the funds to build its tech, expand its team and grow its network of farmers.