It’s a very interesting time for African agriculture and food, the continent is realising it’s potential to help feed the world, money is flowing into infrastructure to unlock this, more and more talent is coming into the space and the realisation that agro ecology or regenerative agriculture is no longer a nice niche with big margins but has the potential to become the predominant way of agriculture is performed. 

After putting over $ 20 million to work in East Africa, Ivan Mandela, founder of SHONA Group, has learned the hard way: chasing Western style so called unicorns might not be the right approach for a predominantly agricultural society. So he shifted his approach and started investing in real companies, to help create a functioning main street a functional real economy where unicorns will naturally start to occur. We discuss why Ivan ends up mostly backing female entrepreneurs, his tips for young students and his takes on nutrient density and quality.

Ivan Mandela is co-founder of Shona capital, which provides East Africa’s SMEs with flexible debt to help them grow and achieve their full potential, and co-founder of Rootical, a start-up studio enabling purpose-driven entrepreneurs in Uganda to build and own their regenerative agri- food companies.

This episode is part of The African Regenerative Frontrunners series is supported by Rootical and co-hosted by The Organic Guy. 

STOP CHASING UNICORNS IN AGRICULTURE AND FOOD; BACK REAL COMPANIES FIRST

Ivan explains the pivotal shift in his investment strategy after realising that chasing high-growth unicorns was not working for the African context and that true economic transformation must be built on a foundation of small and medium-sized businesses.

“But I think over time, and even though we had some success stories, a lot of the businesses we supported or invested in failed, and so the story of this is that you rely on two or one that have to give you the return and the scale that covers for the eight that failed. And I think that story for us didn’t just add up.” —Ivan Mandela

AGRICULTURE AND FOOD IS 80% OF THE ECONOMY

Agriculture should not be viewed as a sector to move away from but rather as a massive opportunity, given that it employs the vast majority of the population and forms the bedrock of the economy.

“Because our economies are 80% agriculture, and so others are arguing we should move out of agriculture, right? But our argument is agriculture is actually an opportunity if you have 80% of the population employed there.” —Ivan Mandela

MORE MONEY IS FLOWING INTO THE AGRICULTURE SECTOR, INFRASTRUCTURE, ETC.

There is a growing recognition of the sector’s importance, driven by global food system dynamics and the continent’s potential to feed the world, which is leading to increased intentionality from both governments and capital markets.

“I think there’s more and more intentionality around policy but also in investing in infrastructure (`…). Because I think governments and I think the private sector… we recognise the opportunity that we have from a global perspective.” —Ivan Mandela

WHY WOMEN BUSINESSES ARE MORE INTERESTING FROM AN INVESTOR PERSPECTIVE

Ivan shares data-driven insights on why their portfolio naturally shifted to over 50% female entrepreneurs, highlighting that women-owned businesses often demonstrate stronger growth and lower risk profiles.

“But I think after, as we’ve looked at the data more, women’s businesses are growing faster after our investment, the first 12 months. They come in smaller, again because of course, the history. But they jump from where they are within the first 12 months is stronger. (…) We expect fewer defaults when we invest in female entrepreneurs.” —Ivan Mandela

OTHER POINTS DISCUSSED

Koen, Brian and Ivan also talked about:

• how agroecology can take over and become the norm instead of the exception

LINKS:

• Shona Capital
• Rootical

LINKED INTERVIEWS:

• Omoke Brian – Inside Africa’s regenerative agriculture opportunity
• Million Belay – Why the USAID shutdown was a gift to agroecology in Africa

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The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.