ImpactAlpha, April 17 – Private equity firm Secha Capital made its name as an early investor in South Africa’s bread and butter businesses. Its latest investment is in FarmTrace, a farm management software company that is based in Limpopo, a region known for high-value crops like citrus, macadamia nuts and avocados. The investment will help the company expand in the Western Cape, known as South Africa’s wine region.
As part of the deal, FarmTrace will launch an employee stock ownership plan, or ESOP, for 20% of the company. “It’s a standard option pool that will be based on tenure at the company and also help FarmTrace attract the talent it needs,” Secha’s Brendan Mullen told ImpactAlpha.
Hassium Capital invested alongside Secha.
Farmer familiar
FarmTrace’s software helps mid-size and commercial farms consolidate production information and manage their operations. Unlike systems built for commodity crops like wheat, corn and soy, FarmTrace is designed for cash crops.
The eight-year-old company is profitable and has until now bootstrapped its growth. “We have a long back-log of interested farms, so we decided to raise capital to accelerate our growth and meet the needs of more farmers,” said FarmTrace’s Jacques du Plessis.
Agtech opportunity
The deal is Secha’s second in the agtech sector; it has also backed Cultura Fresh, a hydroponic vegetable producer. The investment firm, which invests in what it calls “boring businesses,” says FarmTrace was built by founders from the farming communities they are serving.
“It wasn’t built in Silicon Valley,” said Mullen. “It’s not trying to be fancy. It’s an operating system for the farm, built by farmers, that is not asking them to do anything differently. It’s just helping farmers go from gut-and-feel operations to data and analysis-based.”
