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.
The faster turnover of those transactions makes this type of debt a better fit for the business. 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.
He noted that agriculture becomes more scalable when financing is available and sustainable, adding that the company secured debt at a rate that was “more conducive” to the sector.