Agribusiness Booster (AbB), an impact investment fund backed by ICCO Cooperation and Incluvest B.V, launched its operation in Bangladesh recently. The fund aims to invest in pre-growth Agro SMEs in the country that works in the food value chain.
We recently sat down with the Lead of Agribusiness Booster-Bangladesh, Ms. Naba Nashit Tareque, to talk about AbB, what kind of companies it is looking for to invest in, its investment criteria and future plans.
Future Startup
Briefly tell us about AgriBusiness Booster.
Naba Nashit Tareque
We are an impact investment fund focused towards developing countries. Our main purpose is to support agriculture-based SMEs which are working within the food value chain.
Through a tailor-made set of equity investments and business development services, we help these companies to grow to full business maturity to increase their overall social impact by increasing the supply base of producers.
Our strategy is to work with agro-SMEs and share risks, costs, and returns. Maximize SMEs’ value creation and capture their value growth for the further development of the market system (farmers, traders, processors, and consumers) for nutritious and affordable food.
We are currently operating in more than 10 countries including Kenya, Ethiopia, Uganda, Madagascar, Cambodia, Indonesia, India, Kyrgyzstan, Bolivia, Colombia, Paraguay, Equador, Nicaragua. However, and our operation just started in Bangladesh.
As part of our operations in Bangladesh, we have acquired Tinder Capital Bangladesh Ltd, an impact invest firm, which will be renamed as Agribusiness Booster. Mr. Jerry Nicholson from TC Ltd. has developed an app called Pre-ignition app that helps companies to analyze their investment readiness. We also call it the Investment-readiness Toolkit.
Before investing in a company, we try to assess the business potential and whether the product has a prospect in the local and international market, whether the entrepreneurs are committed.
We not only invest in an SME, we also give them strategic advisory support and help them to explore the European market. This is one of the key benefits our investee companies receive.
Before investing, we work with an SME for the first 5/6 months to understand the nature of their potential. If we find a good fit, we go ahead with the investment and business development support to help the company grow.
We never take a controlling stake in a company but we do play sort of a co-entrepreneurship role in the companies we invest. We participate in the board, provide technical and operational support and help raise further investment when required and as I said, help in accessing international market.
Future Startup
How much do you invest in a company? Do you have an average ticket size?
Naba Nashit Tareque
Our investment currently ranges from Euro 50,000 to Euro 250,000. In return for the investment, we take an equity stake in between 20%-49%.
Our objective is to multiply the value of the Company three times in a period of 3-5 years after which we either exit, re-invest or connect the company to more professional impact investors like ICCO Investments.
Another thing that we emphasize very much is that we want the companies in which we invest to have a role in the development of the country's economy.
We want our investees to have close ties with the people on the root levels, especially with the farmers. Although it is quite tough to achieve in Bangladesh, but it is easier for us to deal with people who do contract farming.
Future Startup
What are the criteria you employ when you decide to invest in a company?
Naba Nashit Tareque
In respect to the entrepreneur, s/he has to have a vision and has to be committed And, in terms of the organization, we go for companies that are already operational and has started its marketing activities, have viable business model with scaling opportunities and have solid exit potential
We also prefer companies that have an employee size of 5 to 50. The product has to be in the food value chain. And the businesses must have connections with root level producers and farmers.
Future Startup
How do you find companies to invest in?
Naba Nashit Tareque
At this stage, we are doing it mostly through word-of-mouth. We also have plans to launch a program this January. We are supported by two organizations: DAI and Business Finance for the Poor Challenge Fund for our local operations
USAID has a project called Agro-Value Chain (AVC). We have received a sub-contract from AVC to scout at least 70-90 SMEs and apply Pre-ignition app to see how suitable they are for AbB.
From there, we will finalize at least 20-30 cases for the next stage. This will be our first pilot project in the Southern Delta of Bangladesh. We will arrange several workshops where we will invite agro SMEs and other stakeholders to assess SMEs and select the ones that fit with AbB.
Future Startup
What are the plans going forward?
Naba Nashit Tareque
We have just started Bangladesh chapter. We want to work with as many agro-SMEs as possible who want to scale up their business with AbB as a co-entrepreneur, at the same time make an impact in the lives of rural farmers and improve food security condition of Bangladesh.
We have made investments worth Euro 2.2 million globally and realized 21 investments. We aim to emulate our successful business models in Bangladesh as well.
