Case Study: Beyond Transactional Advisory Services

Implemented by the Palladium Group, MFA engages business advisory service providers to improve their capacity to support agribusinesses and deploy incentives to financial institutions that expand their lending to agriculture. The finance facilitated will enable farmers to purchase agricultural inputs, boost production, invest in processing, or undertake other activities to expand their businesses. From 2020 to 2024, MFA is expected to help 81,493 enterprises receive $261 million in finance, leading to $500 million in new sales. One of MFA's objectives is to ensure that agribusinesses can attain financing under favorable conditions in terms of tenor, interest rates, collateral requirements, and transaction costs. MFA has contracted two international business advisory service providers (ITAs) – Open Capital Advisors and CrossBoundary – to provide assistance to agribusinesses. The case study presents practical insights on emerging challenges encountered by agribusinesses during negotiations with investors. It illustrates how one MFA transactional advisor helped resolve them by providing non-traditional business advisory support. The study explores how this additional form of support can be harnessed to increase agribusinesses' access to investment under favorable terms that enhance repayment. is an agritech company established in 2017 by . Operating from Ghana's capital Accra, the company has developed a digital platform which provides an easy and inexpensive way for individuals to own and remotely manage a farm and for buyers to source quality farm produce from African farmers. The platform allows individuals or cooperatives anywhere in the world to "buy" a farm for a single cropping season via and then manage and monitor it online. The company's agronomists design the farming protocols and work with smallholder farmers to grow the crop according to the specifications. This ensures a ready market for the farmers even before they start growing any crop and generates more and secure income for them. currently employs 32 permanent staff (18 male and 14 female) and 516 casual workers (235 male and 281 female). The company anticipates creating 18 more direct jobs by the end of 2021 to expand operations and reach more farmers. is seeking to optimize current operations and potentially expand to support more value chains on the platform. The company's operations must be further automated as it engages more farmers and extends into new regions. The company is also seeking to build decision-making functionalities to help digital farmers plan their fields using data from market intelligence, field, weather, and soil intelligence. The company is expected to impact about 1,197 smallholder farmers (568 male and 629 female) engaged in the production and aggregation of soy, maize, groundnut, chili pepper, ginger, and sweet potato. is raising a seed round of $1.5 million to scale its operations and reach more farmers in Ghana and prepare to expand to other African countries. The additional capital will enable the company to recruit key high-level staff and hire more developers and agronomists to expand its digital agribusiness platform and supply chain. CrossBoundary, an international transactional advisor, provided support on the seed fundraising round. The company had already raised $ and sought support from CrossBoundary to help raise the remaining $1.5 million. Although had previously engaged some investors with success, its financial model was not adapted to its business model and some investors found it difficult to understand. Faced with the challenge of simultaneously running the company and engaging investors, did not have sufficient time to revise or prepare a new financial model to sustain the fundraising activities. CrossBoundary developed a marketplace model for to better represent their new business model and replace the operations-based model that the company was using. The company now uses the new marketplace model to engage with new investors. With the new model, investors can quickly understand the company's business model, proceed into discussions and due diligence, and eventually subscribe to the round. Following the development of the marketplace model, CrossBoundary has been able to successfully raise $ for and has proceeded to engage other investors to raise $. The company is also leveraging the model to raise debt to finance working capital, which CrossBoundary is also supporting. Following the growing demand on the platform and investors' interest, the company is gearing up to raise a series A, which is anticipated to close by the second quarter of 2022. "The model that we have built is not only for this fundraise. It is going to be used by the company on future fundraises. It was the one thing that investors were asking for and it could easily be adapted as the company evolves." Fanta Conde, Associate Principal at CrossBoundary. CrossBoundary's engagement with went beyond the provision of traditional financial transactional advisory services for a capital raise. It also provided transactional commercial legal support and critically reviewed and advised on the funding documentation and market standards. had engaged an investor as part of the fundraise but received an offer with complex terms which left the