The missing piece in Agritech funding 

Some of the things they do range from: AI-Powered Precision Farming: Think of it as "smart farming"—AI analses soil data, weather patterns, and plant health, ensuring crops get the right care at the right time.

Vertical farming: Forget sprawling fields—crops now grow in high-tech indoor farms, stacked like bookshelves, slashing water use by 90 percent and eliminating the need for pesticides.

Biotech for drought-resistant crops: Scientists are engineering seeds that thrive in harsh conditions, meaning more food even in drought-prone regions.

These solutions can reshape not only agriculture in Uganda but also have a far-reaching impact on a global scale with higher yields, lower costs, reduced environmental damage, and increased food security for millions of people. But these startups are broke.

They struggle to attract funding. Investors hesitate because agriculture isn’t as "fancy" as fintech or AI-driven social media algorithms. Plus, farming is slow, unpredictable, and dependent on nature—things Venture Capital firms (VCs) are not too keen on.

So, the startups that could feed the world are starving for cash.
Agriculture is Uganda’s economic backbone, employing 70 percent of the population, national statistics show—yet it is running on financial fumes.
Farmers need money to grow. But only 10 percent qualify for formal credit, the Central Bank data shows.

Calculations by the Uganda Investment Authority have now put a Shs1 billion financing gap in this sector.
One of the reasons why this figure has been exacerbated is that banks see farming as too risky, shutting farmers out of loans.

The other thing is limited technology as many still rely on age-old methods while the rest of the world moves to AI-driven precision farming.
Lastly is the climate mayhem, which is rooted in the fact that rainfall is as unpredictable as a plot twist in a telenovela.

Venture funding
“It is not just about opportunities; it is about the stage of the venture market locally,” says Agnes Aistleitner Kisuule, a partner at First Circle Capital, a fintech focused on VC fund investing across Africa.

“Our fund is one of the few VC funds with an office here. There aren’t many others, which signals both a small ecosystem and a shortage of angel investors.”

Agritech startups struggling to secure funding echo this sentiment. Many approach local financiers, only to be trapped in endless approval loops that stifle their momentum.

According to Kisuule, this bottleneck is rooted in the limited traction among venture capitalists, a gap slowly being filled by emerging angel investors who believe in local startups—not just in their business models but in their credibility and vision.
“We need to connect stakeholders, raise awareness about angel investing, and demystify how it works,” she explains.

But Uganda’s venture market is small, even within East Africa.

“The big market is regional, but even from a global perspective, it is still small,” Kisuule notes. “Expectations of founders have to align with those of investors.”
The dream of building a local agritech unicorn? Unlikely, she says, because hyper-local solutions that are not scalable tend to yield low returns for even the investors themselves.

“If your solution can be deployed across Africa, you have the potential to scale. If not, you need a different mindset on how you fundraise and build your business. One overlooked avenue is insurance. Intra-tech is a huge opportunity. Uganda’s market is ripe for insurance innovation, yet it is still vastly underdeveloped. Commodity exchanges are also emerging, though their viability as venture-fundable businesses remains uncertain. Just because something is not venture-fundable does not mean it lacks value. It just requires a different investment approach,” says Kisuule.

But every startup needs venture capital, only that it is hard to find.
“Venture capitalists want to see 10 percent week-on-week growth for extended periods. That is the pressure of VC funding. Creating more awareness around these dynamics will help entrepreneurs understand where they fit,” Kisuule notes.

There are alternative funding sources though like small-cap private equity. But these come with different growth expectations.

Early-stage investment
That is where the early-stage investment comes up – to bridge the gap in financing of this ecosystem for agritech startups.
Building a thriving startup ecosystem is like growing a forest—you need seeds (ideas), fertile ground (market demand), and most importantly, water (funding). But in Uganda, early-stage investment is more of a trickle than a downpour.
The big question is: What qualifies as early-stage investment?

According to Adam Ly, an investment associate at Digital Africa, a France backed startup financier, early-stage startups are those that have either raised no capital or only scraped together a small amount before seeking external investment.

But while there are funds—both local and international—willing to invest in Uganda, most require startups to meet certain minimums in terms of traction, revenue, and growth.

“But many Ugandan startups struggle to hit those benchmarks without initial funding to get off the ground,” Ly says.
Without funding, startups turn to bootstrapping—relying on personal savings, side gigs, or sheer hustle to keep the lights on.
But bootstrapping is brutal. Only a handful of startups can pull it off.

In more developed ecosystems, business angels step in early, injecting capital at the riskiest stages, allowing founders to focus full-time on building their companies.

But in Uganda, there are not enough of these early believers—which keeps startups stuck in a chicken-and-egg situation: they need funding to grow, but they need growth to get funding.

“It is not that investors don’t want to fund early-stage startups—their own hands are tied. Investment funds raise money from other investors, who often have low-risk tolerance. Every fund has a mandate dictating what they can and cannot invest in, and ultra-early-stage startups are often too risky to fit the bill. The result? A frustrating cycle where startups are too early for investors, and investors are too cautious for startups,” Ly notes.

Now, Digital Africa, a subsidiary of Proparco (part of the Agence Française de Développement (AFD group), is one of the firms that are trying to break this deadlock. They are stepping in as business angels, writing small cheques—starting from €20,000—to give startups just enough breathing room to gain traction.

“For many founders, that is the difference between juggling a day job and going all-in on their startup. With this early push, startups can grow to a stage where bigger investors start paying attention,” Ly elaborates why this is.

An emerging ecosystem
A wave of funding solutions has emerged to tackle the Agritech startup cash crunch, but there is a catch—most are fintechs fixated on mobile money and payments, while the real awaited solutions—lending and insurance—are left sitting on the bench.
For farmers, the risks are high: unpredictable weather, fluctuating markets, and limited access to credit.

Fintech could be the hero Uganda’s startups need—offering agri-loans and insurance to fill the funding gaps. But without serious backing from development financiers, it is just a great idea with no fuel to take off.

When funding gets stuck – options to lure investors as Ly suggests are sort of like digital distribution of agricultural goods, especially for international markets.

“It is not flashy enough for venture capital, but private equity might take an interest,” he notes.

What do investors look for in agritech startups?
According to Kisuule, investors are not just throwing darts at a map—they analyse:
-Market size – How big is the opportunity? Is it growing fast?
-Scalability – Can this solution expand beyond Uganda, or is it too local?
-Competition – Who else is in the game?
-The founding team – Do they have the right skills and reputation?
-Traction – What have they achieved with the resources they have?

Kisuule explains that investors don’t just write cheques for ideas—they fund execution.

“A startup that acquires customers, builds strategic partnerships, and generates traction with minimal resources is far more attractive than one that just says, “We need capital”, she elaborates.