Sidai

Year: 2017 Geographic Region: East Africa

Criteria Met:
  • Catalytic
  • Discrete
  • Mid-Implementation
  • Unexpected
About the Project
The Situation
The Roadblock
The Solution
The Situation

Farmers and pastoralists in Kenya struggle to access quality inputs, services, and reliable knowledge to improve the productivity, security, and profitability of their livestock and crops. Approximately 60% of inputs in Kenya are substandard or counterfeit, and 85% of retailers are unqualified, making it hard for farmers to get the inputs and knowledge they need to farm successfully.

Sidai Africa is a Kenya-based, social enterprise providing high-quality agricultural inputs, services, and training to over 200,000 farmers and pastoralists in Kenya enabling them to farm their crops and livestock more productively and profitably. Fully vertically-integrated, Sidai supplies quality livestock and crop inputs such as seeds, fertilizers, feeds, and vaccines along with training to farmers and pastoralists across Kenya. The company operates through a unique national network of branded, professionally-staffed, company-managed, and franchised retail outlets, stockists, and field staff. Sidai has a unique ‘last-mile’ service delivery model that also reaches pastoralists and farmers in remote and under-served locations.

Sidai has significantly improved the quality of life of its customers, improving productivity of crops and livestock and thereby increasing household income.

The Roadblock

In the Spring of 2017, a UK-based animal nutrition company expressed interest in investing in Sidai. Conversations progressed and Sidai was on track to close the round of equity investment in early 2018.

The investor required financing from European Investment Bank (EIB), however due to the likely departure of the UK from the EU, the EIB financing could not be closed. To be eligible for EIB financing, the UK-based investor needed to set up a company in Ireland.

In addition a second strategic investor expressed interest in investing in the company but pulled out after 4 months of discussions, which further delayed the conclusion of the investment.

The delay in committed funding as it’s investor secured EIB financing, threatened Sidai’s business and impact.

The Solution

In June 2018, Open Road provided Sidai with a $250,000 bridge loan to enable them to continue their work as their UK-investor established a company in Ireland and got the legal documents in place to secure EIB financing.

The loan allowed Sidai to continue serving hundreds of farmers and pastoralists across Kenya and continue building towards plans to scale across Africa. Open Road was fully repaid by the UK animal nutrition company at the end of December 2018 as the final deal structure was agreed between all parties and legal documents completed.