Kenyan Agritech iProcure Faces Administration Despite raising $17.2 million

Kenyan Promise in Peril: iProcure, a leading Kenyan agritech company that streamlined agricultural product distribution, has been placed under administration due to unpaid debts. This news, emerging on April 26, 2024, casts a shadow on a company once seen as a bright spot in the African innovation landscape.

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Taking Control: A court has appointed KPMG’s advisory arm as the administrator for iProcure. Their mission: to revive the company backed by Safaricom’s Spark Fund. If revival efforts prove unsuccessful, liquidation will be considered as a last resort to settle outstanding debts owed to creditors.

New Leadership, Mounting Pressure: Makenzi Muthusi of KPMG will take the reins at iProcure, overseeing all aspects of the company’s operations, assets, and creditor claims. A notice issued by KPMG states a May 14th, 2024 deadline for creditors to submit documented claims for consideration.

A Company with a History of Innovation: Founded in 2013 by Stefano Carcoforo, Nicole Galletta, Patrick Wanjohi, and Bernard Maingi, iProcure aimed to bridge the gap between agricultural suppliers, retailers, and distributors. Their services extended beyond basic connections, offering inventory management and credit facilities across the agricultural supply chain.

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Financial Trajectory Raises Questions: Despite facing administration, iProcure boasts a history of successful fundraising, accumulating a total of $17.2 million across five investment rounds. A significant portion came in August 2022, with a $10.2 million Series B funding round coupled with additional debt financing, earmarked for expansion into Tanzania. Further bolstering the company’s prospects, iProcure secured a $1.2 million grant from USAID in March 2023 as part of a larger initiative supporting Kenyan food production.

The Puzzle Remains Unsolved: Despite these seemingly positive financial indicators, the reasons behind iProcure’s current state are shrouded in mystery. The exact amount of debt owed and how significant fundraising efforts failed to ensure sustainability remain unanswered. While a former employee anonymously mentioned cash flow issues and a high burn rate as potential contributors, the complete picture remains unclear.

Leadership Shift and Unanswered Calls: In a move intended to safeguard iProcure’s future, Niraj Varia, previously a partner at Novastar Ventures, was appointed as Group CEO in 2022. When contacted for comment, Varia stated he possessed “no more information than is in the public domain,” having left the company in 2023. As of now, iProcure itself has remained silent on the matter.

Looking Forward with Questions: The future of iProcure hangs in the balance. While the court-appointed administrator attempts a turnaround, the possibility of liquidation looms. This situation raises crucial questions for the African agritech industry. Strong financial management, responsible spending, and transparency with investors are paramount for sustainable growth. A thorough investigation into the reasons behind iProcure’s downfall is necessary to ensure such pitfalls are avoided in the future.

The story of iProcure serves as a cautionary tale for the burgeoning African agritech sector. Innovation and ambition are essential for progress, but so too is a clear understanding of financial realities. As the future of iProcure unfolds, the African agritech industry must learn from this experience and prioritize financial responsibility alongside innovation to ensure long-term success.