FUNDS:
Dara Venture Partners currently has 1 investment fund; The Feed Africa Agriculture Fund (FAA Fund). The FAA Fund offers a set of financial products, including loans, equity, and quasi-equity, specifically tailored to the needs of smallholder farmers and agri-SMEs.
FUNDS STRATEGY:
The Fund invests either directly in SMEs and farmers’ organizations, or indirectly via financial institutions.
Direct Investment
The Fund offers direct funding to SMES, cooperatives or farmers’ organizations operating in underfinanced yet profitable segments of agricultural and agribusiness value chains. The target entities are listed as follows.
- Producers of primary agricultural products
- Aggregators and/or processors of primary agricultural products
- Processors of secondary agricultural goods/ food products
- Input suppliers such as manufacturers or distributors of seeds
- Companies that produce, maintain, or operate warehouse/storage facilities.
- Service companies such as traders, veterinarians, mechanization
- Logistics companies that transport and handle primarily agricultural goods.
The financial instruments, applicable ticket size and tenor of the Fund’s direct investments are presented in the table below.
|
Financial Instrument |
Tenor |
Indicative Amount Range |
|
Working Capital Facilities |
Up to 24 months, typical tenor 12 months |
$ 50K – 150K |
|
Term Loans |
3 – 5 years |
$ 100K – 1M |
|
Sub-debt / Equity |
5 – 7 years |
$ 300K – 3M |
INDirect Investment
The FAA Fund invests in financial institutions providing financing solutions to smallholder farmers, cooperatives, farmers’ organizations, and agri-SMEs. The target entities are listed as follows.
- traditional banking institutions actively lending to smallholder farmers and agri-SMEs (e.g., agri-banks, microfinance institutions) or seeking to grow their agri-portfolio.
- insurance companies covering the agricultural risks of smallholder farmers and agri-SMEs.
- non-banking financial intermediaries lending to smallholder farmers, cooperatives, savings and credit cooperatives, farmers’ organizations, and agri-SMEs.
The financial instruments, applicable ticket size and tenor of the Fund’s indirect investments are presented in the table below.
|
Financial Instrument |
Tenor |
Indicative Amount range |
|
Term Loans |
3 – 5 years |
$250K – 1M |
|
Sub-debt /Equity |
5 – 8 years |
$100K – 5M |
INVESTEMENTS THEMES
(a) Sector: Smallholders and youth in remote areas: The FAA Fund has a unique aim: it offers a blend of financing to smallholder farmers in the most remote and rural communities. It will focus on young agro-entrepreneurs who are often underserved financially.
(b) Ticket Size: Small-scale “missing middle” financing: The Fund provides small investments (from US$50,000 to US$5 million) to small and medium-sized enterprises (SMEs) and young rural agro-entrepreneurs to fill the missing middle financing gap.
(c) Structure: One-stop-shop impact investing: The Fund offers not only direct financing to farmers but also technical assistance and financial intermediation. This innovative approach will offer a one-stop shop of products to rural agro-entrepreneurs.