Farmula: Creating B2B digital infrastructure to connect farmers to buyers in Africa

How a Nigerian agri-tech startup is creating a B2B digital infrastructure that allows farmers and customers to directly interact, driving up margins on both ends.


Mummy Ayo, a retailer in the heart of Somolu Lagos trades FMCG’s ranging from rice, beans, palm oil to spaghetti and noodles. Twice a week, she has to go to Mile 12 or Oyingbo market to restock. Understanding how difficult the day would be, she has to lock her shop and plan her market runs for half a day. On getting to the market, she realizes that prices of beans have increased by 50% and her “regular customer” is not even around. She ends up buying insufficient stock. Mummy Ayo is one of the hundreds of thousands of retailers in Lagos and millions across Africa facing the same problem - the inefficient operation of food supply chains in the continent.

Luckily, this problem could soon be a thing of the past with the recent launch of Farmula, a digital infrastructural platform that uses technology to connect players in the food supply chain in Africa. The MEST funded platform allows buyers to post their demand requirements on its platform. It then matches buyers with inexpensive, high quality produce, while handling payment and the delivery of the produce within 24 hours.

“Farmula builds simple software tools to digitize the primary operations of key players across food supply chains. As our population grows and supply chain dependencies become more fragile, our objective is to connect the fragmented pieces of the B2B food supply chain under one platform. Our vision is to be the number one software service for traditional players across our food supply chains,” Ibrahim Abdulmalik, the Chief Operating Officer at Farmula tells IDG Connect.

Using software to solve problems in food supply chain

Farmula seeks to solve problems in the food supply chain in Africa using software. But this inefficiency is broad and for Abdulmalik it boils down to three key points:

“First, the B2B supply chain in Africa is operated manually. Purchases, sales, logistics are mostly done manually. As our population grows, the need for more efficient processes to drive transactions across the chain becomes more obvious,” he tells us. “Secondly, because these operations are manual, interoperability is scarce. [For example] Mummy Ayo needs to keep in touch with multiple distributors for single inventory restocks that sometimes happen more than once a week and thirdly, these operations mean real-time useful data becomes evasive to capture. Data on the fact that Mummy Ayo buys beans more than once a week or she buys one and half of a 120Kg sack on each occasion. Without this, her access to credit is strained.”

Farmula founders Vivian Opondoh (CEO), Jacky Kimani (CMO), and Abdulmalik came up with the idea while they met at an entrepreneurship program in Ghana in 2018. They officially started operations in November 2019.

“Farmula started out in Ghana where we carried out our feasibility studies. As a diverse team of individuals coming from different parts of the continent, we understood the same problem from different perspectives. We tested out our assumptions there and the results were the same. We however launched in Kenya because we had a better understanding of the market there,” Abdulmalik tells us.

On-boarding process

Farmula is still in private beta where it is working with retailers within specific localities until it fine-tunes the costs associated with making the service seamless. The startup uses direct sales to onboard retailers onto the platform taking into consideration certain factors like average order value, the inventory sold, and if the retailer uses WhatsApp. After onboarding, the startup passes the information to its internal sales team.

The platform groups producers into two broad categories; those who work within unstructured chains and those who don’t. For unstructured, it looks at those along cassava, rice, and cowpea value chains for instance while on structured chains, it mainly focuses on products with high market penetration like spaghetti, noodles, and tomato paste. More vetting goes into ensuring the producers meet quality requirements and this is mainly done on unstructured chains. In the end, the result is a one-stop shop for retailer inventory needs.

“As a farmer, we ensure you have access to quality input and a steady market for your output. As of now, Farmula does not manage farmer relations, we do this via third parties,” Abdulmalik explains, adding that “We are building efficiency into the chain from the demand end where we have a better experience. We currently serve the demands of food service businesses, from hotels to retailers and restaurants. We provide these retailers with access to their inventory requirements in the shortest times and at rates better than the market. This means that all retailers can order and receive a carton of noodles at rates cheaper than the market and get them in under an hour. We are [also] building out features that will allow our retailers to access BNPL [buy now pay later] solutions from partner financial institutions.”

Farmula offers a user-friendly distribution software. They use an inventory management app called Distro which gives them real-time inventory information across the board allowing the retailers to access the stock they need. With this, they combine off and online processes by utilising a distinct distribution design with their proprietary tech. This distribution design provides the framework for how each location operates, what they stock up and where they are located. Upon this is where they leverage tech. And even though they currently get most of their orders over phone calls, they also have an automated assistant over WhatsApp called I/O through which customers can order and pay for inventory over a couple of messages.

The platform

Farmula is building digital solutions that enable primary supply chain players to automate most of their key operations. From market discovery to payments and logistics.

On the producer side, the startup holds that when the output of a farmer is compromised, it compromises the final product. To counter this, they hold their third-party firms accountable for the final products they get in terms of quality. They work only with firms that meet certain criteria in terms of farmer engagement.

For the rest of supply chain, their current core focus is on the buyer side, focusing on providing tools to digitise B2B supply from Producer to Distributor (Distro) to Last Mile B2B (Driva) to Retailer (I/O) and use the data to drive supply from the producers.

Customers are able to pay via mobile money, card, or payment on delivery and as mentioned earlier, in the future, customers will also be able to access credit. Distro launched in February of this year, and in the first few months, the team of 10 has recorded $1 million of transactions across 20 different distributors serving 425 retailers.

Looking ahead

Global shifts make us understand that the future of work is remote. With the likes of Andela, Utiva, Moringa School, Talent QL, Africa is breeding world-class talent and outsourcing this talent to global firms. As of now, we are building solutions to local problems. But, as the world gets more interconnected and the quality of our talent improves, what we’ll see is Africans building global solutions “off the bat”. “I’ve seen a lot of interesting ideas recently that are providing different perspectives on global problems. Another factor we will see is more collaborations, mergers, and acquisitions."

Abdulmalik is looking ahead and sees strong growth in the future: “Over the next three years, we aim to grow in three directions; Build the most robust distribution software for the food industry, cover 80% of nonperishable SKU's retailers purchase, structure to unstructured chains to build profitable models for a private label commodity business and introduce BNPL financing options. In the long term, five to 10 years we aim to cover 3/4 of the continent being the category leader for all online transactions covering minimum of 30% market share for online grocery commerce for retailers. In moonshot, we aim at IPO as well as exploring other verticals especially construction.”