Niraj Vara spent The last eight years at Novastar Ventures, a global VC with hubs in Nairobi, Lagos and London, joining him at a startup and rising through the ranks to become a partner. Under his watch, the firm has invested in technology-enabled startups in sub-Saharan Africa, and most recently led efforts to help the firm manage several funds.
He brings this business-development experience to Kenyan agtech scale-up iProcure, part of the Novastar portfolio, where he takes over from founder Stefano Carcoforo and joins as CEO. Appointed Chief Data and Development Officer at Varia, Carcoforo co-founded AgTech in 2014 with Nicole Galetta (Chief Creative Officer), Patrick Wanjohi (Chief Technical Officer) and Bernard Mengi (Chief Commercial Officer).
Iprocure connects agricultural suppliers with local retailers (agro-traders) through a unique distribution infrastructure that connects agricultural supply chains in East Africa. AgTech is designed to address out-of-stock and substandard supplies, bringing new efficiencies that lower and stabilize production costs.
TechCrunch spoke with Varia about his plans to lead iProcure’s growth across Africa and his thoughts on the startup’s investment space in Africa.
TC: You were recently appointed to lead one of Africa’s fastest-growing agtech enterprises, but you have extensive experience as a founder and investor in the tech startup world. You must have great experiences. How has the journey been for you so far?
Varia: My job is a random walk. After a brief stint as an actor, I joined McKinsey & Co. for four years, where I was exposed to multiple industries and business problems. When I left McKinsey, I spent several years trying to bring business opportunities to NGOs and charities in Africa, which led me to work in 12 African countries, interacting closely with regulators, farmers and traders.
At that time, the challenges of rural cooking energy and the lack of a solution to deforestation led me to first venture into my business using mobile money integration to create an infrastructure to distribute alternative energy solutions.
I later left the business with the valuable lessons I brought to Novastar, building investment strategy, systems development and how VCs work in Africa, and most recently spent eight years leading the organization’s operations to build the system. Procedures for developing a scalable platform that can manage multiple funds simultaneously. During this time, my entrepreneurial itch reignited and I founded a catering service catering to the Kenyan middle class, which was doing well, but could not survive Covid.
What inspired you to move from the venture capital world to iProcure, a portfolio company of Novastar Ventures?
I met the iProcure team at Novastar, and I’ve been on their board for five years, but when Carcoforo asked me if I wanted to take on the role, at first I thought it was a crazy idea. I was previously a partner in one of the leading VCs in Africa and transitioning to CEO was not top of mind.
But the more I thought about it, the more I realized that going back to business would give me the opportunity to drive something 10 to 100 times faster—which is not what a venture capitalist should do.
It really makes me change, not just whispering in the ears of creators who really make change happen. All of this is stretching me in a way that no other fund will.
iProcure’s mission has been close to my heart since I left McKinsey & Company. No matter where I’ve been, no matter what agricultural value chain I’ve looked at, consistently using and not applying the right inputs always hampers production. Africa is lagging behind in its ability to feed itself.
The opportunity with iProcure aligns with the exact lessons I’ve learned from my career. First, the business quickly made three pillars from its original business idea before entering today’s produce market, supplementing rather than replacing the relationship between farmers and their local retailer. By using technology to enhance the supply chain of agricultural inputs, instead of trying to replace the trusted relationship between the farmer and the agro-retailer, the company grew 16 times in four years.
Secondly, the group is incredibly diverse. It includes a powerful idea generator, obsessive tactician with extraordinary communication and political skills, focused on building what users want and not what looks good, multi-process developer and operator with huge moving pieces in their head. . After all, we are all friends first and business partners second. This strong culture, deep respect and love for each other will generate high returns.
Joining iProcure was ultimately an easy decision. It’s been a great opportunity for me to learn and grow, and a great way for me to make an impact on a business that, itself, already has a huge impact on over 1 million farmers.
What are your immediate areas of focus at iProcure?
My first priority is to ensure that the company works brilliantly to make the most of this season – given our investments in technology and physical infrastructure, we want to double our reach to 2 million farmers.
I then plan to grow the company to 10 times its current size by building the systems, processes, teams and capital base that will enable the company to transform agriculture in East and West Africa.
We will expand in Uganda and Tanzania and eventually enter Nigeria. We will expand our BNPL offering to enable agrovets to serve farmers without the constraints of their own cash flow. Finally, we plan to invest heavily in our data: we collect unparalleled data on the use of agricultural inputs in Africa; We collect data to create insights to improve our own performance, change farmers’ decision-making, and change outdated practices in the industry.
For early stage startups, mentors play an important role when raising funds or trying to find a market-friendly product. Do you play any role in Novastar Ventures or have any involvement with its portfolio companies, particularly those moving forward as you advise them?
I will not retain any operational or investment role at Novastar, but will continue to advise some of the portfolio companies I have led or supported. Leaving the day-to-day role of advising those companies was, in fact, the most difficult part of my decision to leave Novastar. I was so tied up in the successes and failures of Komaza, Turaco, and Sanerji, that leaving those boards left a huge void in my daily life. Fortunately, some have asked me to continue supporting them, so the void isn’t completely empty yet.
How would you describe the current startup scene in Africa – as you are a founder – and the significant changes you’ve seen so far?
It’s very exciting. There has never been a better time to be an entrepreneur or investor in Africa. The quality of talent is amazing.
The infrastructure that startups need is increasingly being built – these are the days when I have to build integrations into mobile money provider M-pesa myself – there are dozens of companies that do that for me. Gone are the days when you had to make every offer yourself – many companies use technology to do this for you.
Governments alike recognize that startups are critical to solving the enormous problems facing our nations, partly because startups have the technology to help them, but mostly because entrepreneurs see opportunities rather than challenges. This is different from when we went to Novastar in 2014, when startups were struggling to find talent, regulators were scratching their heads, and teams had to build everything themselves.
What do you make of the VC slowdown, the significant implications of this in Africa? How does this benefit the continent?
2022 is a tough year to raise money. After two easy years for entrepreneurs, business models are being tested this year as capital gets harder to come by. While some of this is sensible, many good businesses are being forced into mergers and exits that don’t appeal to investors — even investors — because investors are unwilling to take risks.
I think this is temporary. The performance of successful companies in the continent attracts investors and capital flows again within a year. In the year I have every confidence that the entrepreneurs who lapsed in 2022 will stay in business on the continent and come back better, stronger and wiser to build great businesses in 2023 and 2024. The future is very bright.