FoodLabs, a European early-stage VC investor and venture studio for food, sustainability, and health, led the $1.5M Preseed fundraising round for Terraa, a food delivery platform with headquarters in Morocco. Other investors in the round included the African-focused DFS Lab, Outlierz Ventures, UM6P Ventures, and Musha Ventures.
Terraa plans to use the funding to strengthen its logistics infrastructure and expand across Morocco’s cities and explore new markets within the region in a year’s time.
Youssef Benkirane and Benoit De Vigne founded Terraa in 2022. The startup buys fresh food directly from farmers and distributes it to retailers. Terra aims to bring about change in Morocco’s fresh food supply chain. In order to help farmers reduce the post-harvest losses frequently brought on by a lack of markets, particularly during periods of overproduction, it establishes a reliable and competitively priced market for the food.
“The fresh produce market in Morocco is very fragmented with many intermediaries that have been in business for decades. In addition to fragmentation, what we see is high inefficiencies, throughout the value chains from the farmer to the end consumer. And the other thing is the opacity that we see throughout the value chain,” Youssef Benkirane told TechCrunch in an interview.
“In the next few months, we will build some collection centers in all the major agricultural cities of Morocco. We will use them to store the produce we have collected from the farmers for distribution to the end customers,” Benkirane said.
According to AgFunder’s first Africa Agrifoodtech Investment Report, which was created in collaboration with the Dutch development bank FMO and British International Investment, Agrifoodtech startups received $482.3 million in investments in 2021, a 250% increase from 2020. (BII). Since 2017, the Agrifoodtech startup scene in Africa has raised more than $1 billion.
While the majority of Agrifoodtech financing in Africa has gone to the West and Eastern areas, the North has recently seen an upsurge. With companies like Rabbit, Appetito, and Breakfast all receiving venture rounds in 2021, Egypt now appears to be a hotspot.
Agrifood supply, which includes businesses whose main goal is to promote an efficient supply chain of agrifood goods, is a developing market to watch in Africa.
According to Terraa, it purchases fresh food directly from farmers to complete online orders from merchants, eateries, and other resellers. Its website and WhatsApp are both used for placing orders. The majority of the processes are carried out internally for quality control, but they intend to increasingly collaborate with carefully screened outside providers to support parts of their operations.
Benikrane continues that the startup handles everything, from sourcing from the farmers through the delivery to the final consumer.
“We took this decision because farmers are not that tech-savvy and would require a lot of training for them to know how to best utilize the tech platforms. How we operate ensures that farmers have all the time they need to concentrate on farming.”
Till Hoelzer, an investor at FoodLabs said: “We’re excited about Terraa’s mission of making food more affordable and accessible throughout Africa whilst ensuring secure income for farmers. In regions where mobile penetration is ubiquitous, food supply chains remain highly complex. We see a massive opportunity in leveraging technology to drive quicker and more efficient transactions.”