NEW YORK: A US non-profit is aiming to mobilise US$1.5bil to invest in startups that focus on agricultural adaptation across the developing world by 2030.

Acumen, which has invested in a range of companies across sectors including health, education and off-grid solar power since 2001, said it’s committed to finance US$300mil of the amount itself and mobilise another US$1.2bil.

The programme is intended to help shield some of the world’s 600 million subsistence and small-scale farmers who grow 30% of the world’s food from the effects of climate change, according to Jacqueline Novogratz, Acumen’s chief executive officer.

It follows a similar initiative Acumen is undertaking to boost access to electricity in Africa from off-grid solar.

“Small holders are disproportionately impacted by climate change and we are not seeing climate investing go into adaptation,” she said in an interview.

The planned commitment “makes Acumen one of the largest private adaptation investors in farmers in the emerging markets”, she added.

The fund is a small step towards closing what One Acre Fund, a non-profit that supports small-scale farmers in Africa, estimates is a US$151bil annual financing gap needed to build climate resilience for the sector.

Currently just US$2bil a year of climate finance goes to small-scale farmers.

Acumen plans to complete setting up two funds next year, one in the first quarter and one by the end of the year, she said, declining to identify investors.

The group has, in the past, been supported by the Green Climate Fund, the Ikea Foundation and the United Kingdom’s Foreign, Commonwealth and Development Office.

“It’s new money coming in and it’s also building with existing partners,” Novogratz said.

By 2030 the objective is to boost yields and income for 40 million farmers by investing in 100 startups, Acumen said.

Investment will be in pre-seed, seed and growth stage equity in companies in Pakistan, India, West and East Africa and Latin America.

A range of activities will be considered from solar-drying technology to bio-digesters, which can use manure to produce cooking fuel and liquid fertiliser, added Novogratz.

Acumen has in the past invested in Hatch Africa, which distributes a breed of fast-growing, disease resistant chickens that need less water than other varieties across a number of African nations.

It has also invested in SunCulture, which supplies solar-powered irrigation pumps for small-scale farmers in Africa.

Investors that finance similar ventures to those that may be financed by Acumen include India’s Omnivore Capital and Indonesia’s East Ventures, said Chris Wayne, an associate director at Acumen responsible for agriculture investing. 

 - Bloomberg