ThriveAgric Raises $3.93M Through Commercial Paper – Innovation Village

Nigerian agritech startup ThriveAgric has raised ₦5.3 billion ($3.93 million) through its first commercial paper issuance, opening a new source of working capital as the company looks to deepen its agricultural trading and farmer financing operations in Nigeria.

The Y Combinator-backed company announced the Series 1 issuance on Tuesday during a signing ceremony and media briefing in Lagos. The commercial paper was reportedly oversubscribed after institutional investors placed demand above the company’s initial ₦5 billion target.

The transaction is the first issuance under a much larger ₦50 billion ($37.09 million) commercial paper programme approved by Nigeria’s Securities and Exchange Commission (SEC).

For ThriveAgric, the significance of the deal extends beyond the ₦5.3 billion raised. The company is turning to Nigeria’s debt capital markets to secure the type of short-term financing that better matches how its agricultural trading business operates.

“The initial problem we’ve always faced has been accessing the right capital,” ThriveAgric CEO Uka Eje said.

Why ThriveAgric chose debt over equity

ThriveAgric’s business requires substantial amounts of capital to move between farmers, agricultural inputs, harvested commodities and corporate buyers.

However, not every part of its operations has the same financing requirements.

Agricultural production can take nine to 12 months, making long-term capital more appropriate for some farming activities. Commodity aggregation, on the other hand, moves much faster.

ThriveAgric can finance farmers, purchase their harvested produce, aggregate it and sell the commodities to processors and FMCG companies within a shorter cycle.

The commercial paper will primarily fund this second part of the business.

Rather…