FarmTime Company Ltd, an exciting new entrant to the organic fertilizer market in Tanzania, has secured funding through a debt instrument designed to incentivize investors to back younger entrepreneurs. The $50,000 round was led by Umsizi Fund, which triggered a guaranteed match from the Young Entrepreneurs Fund (YEF).
The company recycles and repurposes plant and animal waste to produce organic fertilizers, delivering consistent and traceable nutrients at affordable prices. Its founder, Jubilate Lema, aims to develop solutions to food security that balance human prosperity and the environment at large. Organic Fertilizers are the first step in an ambitious growth plan.
FarmTime was founded in 2017 and has invested in research and product development, licensing and setting up a factory. They have already processed approximately 9,000 kilograms of coconut husks, 2,600 kilograms of fish waste, and 76 kilograms of seaweed, amongst other inputs.
“I hope more funds take the approach of Umsizi and YEF with a revenue-linked debt instrument,” says Lema, “It was easy to understand, doesn’t load our cap table, and forced us to think about cash flow as well as growth.”
The Young Entrepreneur’s Fund (YEF) was designed to incentivise investments into very young entrepreneurs in Africa. It is a “guaranteed follow” fund that will match investments into ventures led by graduates of African Leadership Academy (ALA) programs, including The Anzisha Prize. Rather than take equity positions, the fund has very intentionally chosen an innovative debt model with variable repayments linked to company revenues.
“YEF is part of a growing move toward more structured exits from investors with a patient capital mandate,” says Josh Adler, Executive Director of The Anzisha Prize, which manages the fund on behalf of ALA, “as a leadership development institution, ALA is able to draw in new forms of support for exceptional young leaders like Jubilate through the fund without having to build investment capabilities internally.”
The Young Entrepreneur’s Fund was launched in 2019 and provides matching investments of up to USD $50,000 to qualifying entrepreneurs. To date over USD $250,000 has been invested across Africa with a growing pipeline of opportunities. Umsizi Fund has supported young leaders in Africa since 2005 with financial and professional development resources.
“This one of the more exciting investments for us in some time with a revenue-linked loan in partnership with YEF,” added Ed Brakeman from the Umsizi Fund. “We’re eager to support FarmTime’s growth and are confident that we as investors will see returns while ensuring support for the business through the challenging period of product launch and revenue ramp-up.”