Why We Invested in AgRails | Powering first-mile data analysis with AI in Africa
AgRails addresses a critical gap in Africa’s agriculture, leveraging advanced data analysis to enhance climate resilience for the continent’s 350 million smallholder farmers.
The Market Need
Agriculture is a cornerstone of the economy in Sub-Saharan Africa, accounting for 17% of GDP and employing 52% of the region’s workforce. Despite possessing 45% of the world’s land suitable for sustainable production expansion and abundant untapped water resources, Africa’s productivity remains low and the continent continues to lose market share globally.
One of the major obstacles is a lack of accurate and timely data at the first mile. This hinders effective decision-making and limits access to essential financial services such as input loans and insurance, crucial for farm productivity and resilience. Meanwhile, new regulatory measures like the European Union’s EUDR are creating additional barriers to Africa’s agricultural exports, exacerbating the need for data-driven solutions. The data gap is crippling the sector’s ability to grow, adapt, and compete on a global scale.
The AgRails Solution
AgRails is a Kenyan-based startup that addresses this critical data gap by building advanced, AI-powered systems to collect, enrich, and analyze agricultural and climate data. Their platform, “a transformative investigative data intelligence solution for African agriculture,” provides hyper-localized, real-time insights tailored to micro-climates. This precision data empowers decision-makers — including insurance companies, ag financing providers, policymakers, and cooperatives — to create more affordable, timely, and hyper-localized solutions for farmers, despite the climate threats.
Key Product Innovations:
Source: AgRails Platform
AI-Enhanced Data Precision: AgRails enriches low-resolution satellite images, achieving fine-grained visibility at farm levels through cutting-edge generative AI. This hyperscaling ensures accurate detection of minute agricultural and climatic conditions.
Radar and Optical Fusion: The system can see through clouds and operate at night, enabling continuous and reliable data collection.
Custom Large Language Models (LLMs): A natural language interface allows users to access and interact with data intuitively, democratizing the insights and making them actionable for farmers and institutions alike, and in mediums that are most accessible to them.
AgRails has the potential to revolutionize agricultural resilience in Africa by enabling better financial products for smallholder farmers, such as accurately priced insurance and faster payouts, strengthening their ability to withstand climate shocks. The team, led by seasoned experts in AI, geospatial intelligence, and climate modeling, brings the expertise needed to scale an innovative solution tailored to the region’s unique challenges.
With impressive early traction and a clear revenue growth strategy, AgRails demonstrates a strong capacity to rapidly scale its impact. Their innovative business model — combining API fees, subscriptions, and tailored insights — delivers value across the agricultural value chain while maintaining scalability and sustainability.
“We view ourselves as a transformative force for Ag and Nature, empowering our customers with large generative climate and investigative systems for the next 2 billion lives.
Our technology is already driving millions in actuarial risk and underwriting solutions. It has supported more than 16,000 metric tonnes of carbon removal and is currently enabling more than 60,000 smallholder farmers to access critical and timely financial services. With the support of Mercy Corp Ventures, the future is bright. We envision a world where climate and agriculture insurance is available to the most vulnerable populations in minutes, not six months, and 70% cheaper than it is now, while enabling 100 times more market reach for the finance companies. A world where a small business in Europe and Americas can purchase impact driven carbon credits from Africa and anywhere else in the world in just three clicks.
We are truly excited to have Mercy Corp Ventures embark on this journey of unlocking the first-mile data potential with us. We hope, together, to make a lasting mark on enabling a more sustainable, financed, and future-proofed planet.” — Mwenda Mugendi, CEO of AgRails
Photo Courtesy of AgRails
Investment Rationale
AgRails aligns closely with our focus on Adaptive Agriculture and Food Systems and Climate-Smart Technologies. By addressing the first-mile data challenge, they empower smallholder farmers with the insights and resources needed to thrive while enabling financial institutions to design resilient, climate-smart services. This investment is an example of our commitment to scaling impactful, data-driven solutions that drive meaningful change in emerging markets.
At the core of AgRails’ approach lies a deep belief in the transformative potential of data. For their team, data is not just a collection of numbers but the key to unlocking untapped opportunities in agriculture. By leveraging advanced analytics and artificial intelligence, AgRails turns complex datasets into actionable insights, enabling smarter decision-making and tailored solutions for smallholder farmers. This data-driven innovation creates a foundation for progress, paving the way for sustainable growth, enhanced livelihoods, and resilience in the face of a changing climate.
