Niraj Varia issued for the past eight years with Novastar Ventures, a global VC with hubs in Nairobi, Lagos and London, who had joined from the start and rose through the ranks to become a partner. Under his supervision, the company invested in numerous technology-backed startups in the sub-Saharan region of Africa, and, more recently, led efforts to help the company manage multiple funds.
It is this business development experience that he brings to Kenyan agtech scale-up iProcure, which is part of Novastar’s portfolio, and which he joins as CEO, succeeding co-founder Stefano Carcoforo. Carcoforo, who will become chief data and growth officer with Varia’s appointment, co-founded the agtech in 2014 with Nicole Galletta (head of innovation), Patrick Wanjohi (chief technical officer) and Bernard Maingi (chief commercial officer).
iProcure connects agricultural suppliers with local retailers (agro-dealers) through a unique distribution infrastructure that connects agricultural supply chains in East Africa. The agtech is designed to address the challenge of stock-outs and sub-standard deliveries, bringing new efficiencies that also lower and stabilize product prices.
londonbusinessblog.com spoke to Varia about his plans to drive iProcure’s growth across Africa, and his thoughts on the current investment space for startups in Africa.
TC: You have just been appointed head of one of Africa’s fastest growing agtech companies, but you also have great experience in the world of tech startups, both as a founder and an investor. You must have had great experiences. How has the journey been for you so far?
Miscellaneous: My career has been kind of a random walk. After a short stint as an actuary, I joined McKinsey & Co for four years, where I was exposed to multiple industries and business problems. After I left McKinsey, I spent several years trying to bring business mindsets to NGOs and charities in Africa, leading me to work in 12 African countries, where I had a lot of contact with regulators, farmers and business people.
At that time, I saw firsthand the challenges of rural cooking energy and the lack of solutions for deforestation, which led to my first business venture, which created the infrastructure that uses mobile money integration to distribute alternative energy solutions.
I later left the company with valuable lessons that I brought to Novastar, where I spent eight years building investment strategies, systems development and learning lessons about how VC works in Africa, and most recently led the activities of the company to develop the systems and processes to create a scalable platform that can manage multiple funds simultaneously. During this time, my entrepreneurial jitters resumed and I set up a food delivery service for the Kenyan middle class, which got off to a good start but didn’t survive Covid.
What inspired your transition from the Venture Capital world to iProcure, one of the Novastar Ventures portfolio companies?
I met the iProcure team at Novastar and I’ve been on their board for five years, but when Carcoforo asked me if I would consider taking on the role, I thought it was a crazy idea at first. I was already a partner at one of the leading VCs in Africa and a move to the CEO position was not on my mind.
But as I thought more about it, I realized that stepping back into business gives me the chance to quickly drive anything from 10 to 100 — which isn’t something a venture manager normally does.
It also empowers me to really drive change, not just whisper in the ears of the founders who really make change happen. All this while stretching in a way no other fund would.
iProcure’s mission has been one that has been close to my heart since I left McKinsey & Co. Wherever I’ve been, whatever agricultural value chain I’ve looked, an inability to consistently access and apply the right inputs has always stunted yields, holding back Africa’s ability to feed itself.
The opportunity at iProcure fits right in with the lessons I’ve learned from my career. First, the company quickly made three pivots from its original business idea before reaching the product market it has today, which complements, rather than replaces, the relationship between farmers and their local retailer. Using technology to strengthen the supply chain of agricultural inputs, rather than trying to replace the existing trusted relationship between the farmer and the agro-retailer, the company grew 16 times in four years.
Second, the team is incredibly diverse. It includes a hyperactive idea generator, an obsessive tactician with extraordinary relationships and political skills, a pragmatic technical leader focused on building for what users need and not what sounds cool, an obsessive process builder and an operator who has huge moving pieces in his head. Most importantly, we are all friends first and business partners second. This strong culture, deep respect and love for each other trumps making higher income or pushing a higher valuation.
Joining iProcure was ultimately an easy decision. It has become a great opportunity for me to learn and grow, and a great way for me to make an impact on a company that is already making a huge impact on more than 1 million farmers.
What are your immediate areas of focus at iProcure?
My number one priority is to run the business brilliantly to get the most out of this season – we aim to double our reach to 2 million farmers, a target that is difficult but achievable given the investment we have made in technology and physical infrastructure .
Next, I plan to get the business ready to scale 10 times its current size, building the systems, processes, teams and capital base needed to transform the way agriculture works in East and West Africa. .
We will expand across Uganda and Tanzania and, over time, to Nigeria. We will also expand our BNPL offering to enable agrovets to serve farmers without being constrained by their own cash flows. Finally, we plan to make a major investment in our data: we collect unparalleled data on agricultural input use in Africa, data that can generate insights to improve our own performance, transform farmers’ decision-making and a very old business to transform. old-fashioned industry.
For early stage startups, advisors play an important role in raising funds or looking for a product that fits the market. Will you be joining Novastar Ventures, or will you have any involvement with the portfolio companies, especially those you advised, going forward?
I will not retain an operational or investment role with Novastar, but I will continue to advise some of the portfolio companies I have led or supported. Leaving a day-to-day role in advising those companies was in fact the most difficult part of my decision to leave Novastar. I am so caught up in the successes and failures of Komaza, Turaco and Sanergy, among others, that leaving those boards has left a big void in my daily life. Fortunately, some have asked me to continue to support them, so the void is not completely empty yet.
How would you describe the startup scene in Africa right now – since you’ve also been a founding member – any notable changes you’ve seen so far?
It’s hyper-exciting. There has never been a better time to be an entrepreneur or investor in Africa. The quality of talent is outstanding.
The infrastructure that startups need is building up more and more – the days when I had to build an integration into the mobile money provider M-pesa myself are over – there are dozens of companies willing to do that for me. Gone are the days when you had to do every delivery yourself – many companies use technology to do that for you.
Governments, too, are quickly realizing that startups are essential in solving the massive problems our countries face, partly because startups have the technology to help them, but mostly because entrepreneurs see opportunities rather than challenges.
This is fundamentally different from when we joined Novastar in 2014, when startups struggled to find talent, regulators strangled them and teams had to build everything themselves.
What do you think of the VC slowdown, any significant effects of this in Africa. How do you predict this will turn out for the continent?
2022 is a difficult year to raise funds. After two easy years for entrepreneurs, this is a year of testing business models as capital is harder to find. While this makes sense in part, there are many good companies that are forced into mergers and unattractive exits because investors don’t want to take risk – even non-daring investors.
This is, I think, temporary. The performance of successful companies on the continent will draw back investors and within a year or so capital will be flowing again. I am confident that entrepreneurs who run out of time in 2022 will stay in entrepreneurship on the continent and come back better, stronger and wiser and build great businesses in 2023 and 2024. The future looks very bright.