Injaro Investments, the manager of the agricultural impact fund IACHL, has sold its 30% stake in seed producer Nafaso to the founders and other shareholders. 

Jerry Parkes, Injaro Principal, said: “This successful exit of our investment in Nafaso demonstrates the possibility of investing in agribusinesses that generate incomes for millions of smallholder farmers as well as financial returns for investors.”

This share sale represents a full exit from Nafaso after a holding period of just under four years.

Injaro invested in Nafaso in March 2013. 

The company’s aim was to leverage the investment from Injaro to increase Nafaso’s output of improved seeds in order to improve farm yields for smallholder farmers; to improve operational efficiency and effectiveness; and to expand operations across West Africa.

Following the investment, Nafaso has achieved significant growth in the past four years. 

Revenue tripled while production increased from 1600 metric tonnes in 2012 to over 5,000 metric tonnes in 2015. 

Nafaso has also expanded operations outside its home country, Burkina Faso, successfully supplying improved seeds to several countries in the ECOWAS region. 

In terms of social impact, over the life of the investment, $9.3m were spent on local procurement, generating improved yields or incomes for 62,000 smallholder farmers and 295,000 indirect beneficiaries. 

Furthermore, with stronger management and corporate governance, the company is better positioned to manage its future growth plans within West Africa.

Abdoulaye Sawadogo, founder and CEO of Nafaso, said: “Partnering with Injaro has been rewarding for Nafaso. This partnership and the constant support from Injaro helped Nafaso strengthen its corporate structure, improve operations and expand our business above expectation. Together, we realised our ambition of becoming one of the largest indigenous producers of seeds in West Africa. We deeply thank Injaro and hope to have avenues for collaboration in the future.”

IACHL (Injaro Agricultural Capital Holdings) makes investments in debt, quasi-equity, and equity in small-and medium-sized enterprises along the agricultural value chain in designated countries of West Africa.

Parkes added: “Agriculture continues to remain the most important sector in West Africa in terms of food security, job creation and income generation. Injaro maintains that investing along the agricultural value chain, especially supporting the growth of local seed production companies, is critical to improving agricultural productivity in the region.”