Deal Summary
Oyster Agribusiness, a Ghanaian company engaged in the production, processing, distribution, and retailing of sorghum, maize, rice, beef, chicken, pork, and dairy products from farms to finished retail products, has raised $2 million from impact investors Root Capital, RDF Ghana, and Sahel Capital. This funding will support Oyster’s efforts to scale its operations and enhance regional food security by training subsistence farmers in climate-smart practices and connecting Ghanaian farmers with reliable buyers. All investors are members of the Aspen Network of Development Entrepreneurs (ANDE), a global network of investment funds, capacity development providers, research and academic institutions, development finance institutions, foundations and corporations supporting entrepreneurship in developing economies.
Terms
- Fund Managers: Root Capital, RDF Ghana, and Sahel Capital
- Funds: Root Capital Fund (Root Capital), Social Enterprise Fund for Agriculture in Africa (Sahel Capital), RDF Ghana
- Deal Type: Debt Financing
- Target: Oyster Agribusiness
- Investment Amount: $2 million
Deal Rationale
This investment builds on Root Capital’s previous $300,000 debt financing for Oyster Agribusiness in 2023. With a rising global emphasis on technology-driven, sustainable agriculture, this funding represents a milestone for impact investors focused on advancing the first stage of the agricultural value chain: smallholder farmers. The potential impact is substantial, especially for new participants like RDF Ghana and Sahel Capital, who together manage over 11 agricultural portfolio companies across West Africa. Oyster’s climate-smart strategies, including the use of feeders and drones in crop production, contribute to climate change mitigation, adaptation, and enhanced food security. This funding will bolster Oyster’s climate-smart initiatives, allowing investors to capitalise on the region's growing demand for sustainable agricultural solutions while meeting their ESG objectives.
- Market Opportunity: Sub-Saharan Africa (SSA) faces growing food insecurity due to climate change, intensifying the need for climate-smart agriculture practices (CSAPs). Oyster Agribusiness is positioned to benefit from rising CSAP adoption rates in West Africa, particularly in Ghana, where the West African Initiatives for Climate Smart Agriculture (WAICSA) seeks to convert over 185,000 hectares to sustainable methods. Adoption rates of similar practices range from 30-78% in Kenya and 39-77% in Mali, suggesting steady growth, but Ghana remains relatively underdeveloped in CSAPs. Oyster’s focus on resilient crop varieties, rainwater harvesting, and sustainable intensification aligns with high-impact CSAPs that have driven productivity gains and reduced input dependency elsewhere in SSA. For investors, Oyster’s integrated model, covering production through distribution, reduces supply chain risks, supports quality control, and streamlines scaling—ideal in markets with logistical challenges. The company’s sustainable practices appeal to buyers focused on long-term, eco-friendly sourcing.
- Risk/Return Analysis: While Oyster shows strong growth potential, scaling climate-smart practices in Ghana faces socioeconomic and logistical hurdles. The pace of CSAP adoption varies significantly across SSA, often due to socioeconomic and logistical barriers. In West Africa, commonly adopted practices include organic manure, crop intercropping, and basic water conservation, but more advanced methods have struggled to take hold. Success will depend on driving widespread adoption among Ghanaian farmers, requiring continued investment in training and infrastructure—a possible risk factor for investors. However, climate-smart practices have been shown to boost yields, cut input costs, and improve long-term soil health—factors that could stabilise revenues and strengthen margins over time. In addition, the involvement of Sahel Capital and RDF Ghana could provide added risk mitigation. Both firms bring deep experience in the West African agriculture sector, and RDF’s risk-sharing tools, like credit guarantees, offer further downside protection. Ultimately, this investment presents a first-mover advantage in Ghana’s climate-smart agriculture market, aligning with sustainable return goals and supporting regional food security.
About the Fund Managers
Root Capital, Inc. is a nonprofit organisation that supports poor and environmentally vulnerable communities in Africa, Latin America, and Southeast Asia by lending capital, delivering financial training, and strengthening market connections for small and growing agricultural businesses. Incorporated in 1999 and based in Cambridge, Massachusetts, the organisation was formerly known as EcoLogic Finance Inc. and changed its name to Root Capital, Inc. in December 2007. With additional offices in Costa Rica, Kenya, Nicaragua, Senegal, and Mexico, Root Capital has raised $323.4 million across five funding rounds and three funds, primarily through non-convertible debt.
Sahel Capital is a private equity firm founded in 2010 and headquartered in Lagos, Nigeria, specialising in emerging growth, buyout, and growth capital investments in the agriculture and agribusiness sectors. The firm targets small and medium-sized enterprises (SMEs) involved in processing, logistics,
