Synnefa Investor Relations
The Silicon Savannah
Here in Kenya, where Synnefa calls home, we've seen the startup scene explode over the last decade. It's been nothing short of incredible. Around here, we call it the Silicon Savannah. It's been quite the sight watching this place grow. You've got your big fish making waves and then the underdogs, rising quietly but surely.
Why I'm Writing This?
Let me give you a bit of context. In 2023, I hit 2,489 working hours. That's a whopping 51% more hours than your standard year-round grind. As a founder, that's just part of the journey, right? Passion and Consistency is what drives us. Despite the year 2023 being dotted with family challenges that made me do a 4-month remote stint in India, the energy hasn't dipped. Not one bit.
Fundraising: A Rollercoaster Ride
Talking about passion, let’s talk about fundraising. Out of 56 tasks, just 1 task of fundraising took 18% of my time. That’s a lot of talking, pitching, and walking potential investors through Synnefa’s vision. It’s been a mixed bag, honestly. Some investors found us too green, others weren’t vibing with our business model after deep dives during due diligence.
But, It's Not All Gloom. On the flip side, some investors really got us. They saw what we're trying to build for Africa and they were on board right from the start. These are the folks who appreciate our commitment to sustainable impact and our unique approach.
The Genesis of This Page
This brings us to why this page exists. It's about clarity from the get-go. We're here to lay all our cards on the table so you can quickly figure out if Synnefa is the right fit for you. It’s a win-win; we focus on empowering farmers, and you get to support a team committed to making a real difference.
Synnefa in a Nutshell
We're in the business of improving the incomes of farmer with tech, but not just any tech – tech that transforms how African farmers work. Our smart greenhouses are decked with the latest IoT sensors, making farming smarter, not harder. These technologies generate data on farmer behaviour and soil health that we share with our partners to enrich our offering to farmers with payment plans and advisory services.
So who are our customers?
Peri-urban smallholder farmers and development partners-NGOs, Farmer Research Centres. This is the early adopter market that is largely buying our products and services, they have a lower acquisition cost and are currently able to pay us faster. They drive 80% of our revenues, keeping our engines running.But the real deal? The rural smallholder farmers. That’s where we’re headed. However, there is a challenge with rural smallholder farmers, and anyone who has worked with them knows these challenges.
Bridging the Tech Gap for Smallholder Farmers
Here’s the challenge: Rural smallholder farmers lack the road and water infrastructure that we need to deliver our solution on top of. To simply get to this farms is such a challenge let alone access water for their household consumption. Thats why we are working with County Governments and the Government of Kenya to layer our solution as they work on massive road and water dam infrastructure projects. West Pokot County in Kenya is a great example of a region we started working with rural smallholder farmers following completion of a good road and set up of a reliable water infrastructure delivering water across thousands of farms in Kabichbich area of West Pokot.
Additionally, our tech is good enough, but it’s not exactly cheap enough for rural smallholder farmers. We’re tackling this head-on by building financing partnerships, shared ownership models, and local manufacturing strategies. All these are to bring our tech within reach of those who need it most. Rural smallholder farmers contribute to 20% of our revenue, we want to grow this to 60% in the future and we want to do this sustainably. Some believe subsidizing products for rural smallholder farmers with grants, philanthropy and big aid would get them to adopt them at scale, but is this sustainable?
We believe otherwise, Our Theory of Change is that if we build and finance climate smart farming tools for smallholder farmers, then they will grow cash crops all year round while using fewer resources, and their incomes will improve. This Theory of Change is what drives our strategy.
Synnefa's strategy: The Four Enoughs
Our strategy for scalability is built on four pillars that we focus on every single day to ensure we drive impact at scale.
1. Good enough: Ensuring our products are not just good, but good enough for farmers to keep wanting to buy them. It must solve a problem for them.
2. Simple enough: Technology has to be simple to use, farmers should not struggle with it. They're already struggling to grow crops, so why add another layer of complexity? We focus on developing user-friendly technology for seamless adoption at scale.
3. Cheap Enough: Affordability is key to accessibility. Tech is good, but if farmers can't afford it, what is the point? We get it! That's why we focus on making our solutions financially accessible to the majority.
4. Big Enough: We ensure our solutions serve a large enough need to ensure scalability and meet the widespread needs of farmers. If it's not large enough then it's not investible.
Our Traction
We have reached 21,000 farmers in East Africa with our installations majorly in Kenya.
Saved over 1.3 million litres of water with Smart IoT sensors.
Built a team of 17 dynamic individuals, all based in Kenya.
Closed 2023 with revenues up 39% from 2022.
Our goal is to grow this to over $5 million in the next few years.
We maintained a healthy gross profit of 43% of our revenue in 2023 with the goal of getting it to 50% by 2025.
We raised a $550,000 Pre Seed Round made up of $300,000 Impact VC and $250,000 in Grants from Development Partners
Shining Moments: Our Milestones
2023: Scored the MIT Solve Grand Challenges title and bagged funding from the GSMA Innovation Fund.
2022: We caught the eye of Forbes and CNBC Africa.
2021: Landed our Pre-Seed round, thanks to Founders Factory Africa and Water and Energy for Food.
2020: Innovate UK funded our pilot to take Smart Greenhouses to market.
Finding the Right Fit: Our Investment Philosophy
If you're in search of a hyper-growth, for-profit venture aiming for a 5x or 10x return in the next few years, let's be upfront – that's not us. The truth is, we don't quite fit into the conventional VC startup mold. Often, venture-backed companies are driven by the need to deliver quick, short-term profits for their investors, which can sometimes overshadow the goal of creating lasting impact. That's a game we're not playing.
Similarly, if your investment strategy is geared towards non-profits – organizations focused solely on impact without the drive for shareholder value or profit – that's not our story either. While non-profits play a crucial role, their reliance on charitable donations may a times limit scalability and sustainability.
So, where do we stand? We're charting a different course.
Synnefa is a for-profit social enterprise with a clear vision: to grow sustainably while generating revenue. Our approach is about balance – driving profit and creating impact. We believe that with the right blend of time and resources, social enterprises like ours can not only thrive financially but also extend the reach of our products and services for greater global access.
Here is my pitch to the world at the just concluded Solve at MIT event held in Cambridge, Massachusetts where I got the chance to share more about Synnefa and what we are building for Africa.
Our commitment is to build a business that stands the test of time, scales impact, and brings meaningful change.
Thinking of Joining Our Mission?
If your investment philosophy and mission align with what we are building, let’s have a chat. I hope we can work together by sharing common values and staying true to the mission of securing futures for farmers in Africa by reducing risks and improving incomes.