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Between 2022 and 2025, African agritech experienced one of the most spectacular capital destructions in emerging market history. While funding soared to a record $776 million in 2022, a silent catastrophe was unfolding beneath the surface: founders were deploying hundreds of millions into physical infrastructure (cold storage units, warehouses, processing facilities) in environments where power outages average 6-12 hours daily and maintenance requires technicians to travel 400 kilometers for a single compressor repair.
The pitch was seductive: "We're the Uber for Cold Chain." The reality? You can't Uber your way out of physics. When 50% of Africa's food production goes to waste due to lack of cold storage, the market opportunity looks infinite. But the operational hell of managing physical assets in permanent turbulence proved fatal.
This week, we deconstruct why the "asset-light marketplace" dream became a $340M lesson in the cost of ignoring infrastructure economics.
—Anderson Oz'.
From The Operator's Desk
Case In Point: In mid-2023, a West African agritech scale-up raised a large Series B to deploy 230 cold storage units across four countries. The deck was pristine: $12/day revenue per unit against $4/day operating costs. At 23% gross margins, the “Uber-for-Cold-Chain” narrative looked inevitable. Investors saw predictable cash flows and a first-mover advantage in a $936B food waste problem.
What We Caught:
Forensic diligence surfaced three structural flaws hiding beneath the spreadsheet:
Invisible Cost Of Goods Sold (COGS): Power outages in Nigeria average 12 hours daily. Diesel backup generators added an immediate $8/day to costs, double the modeled OpEx.
The Maintenance Trap: Remote deployments turned minor failures into logistics events. Compressor repairs required 400 km of travel. With parts theft and no local expertise, maintenance hit $6/day.
Unit Economics Collapse: Instead of $8/day profit, actual economics were -$6/day burn, every single unit.
The Reality:
Of the $340M raised sector-wide, $89M went into this negative-margin infrastructure. Within 18 months, the company pivoted to an “asset-light aggregator model.”
Translation: 180 units, worth $21M, were abandoned to rust.
The Intervention:
The advice was to immediately halt operations. At -$6/day per unit, the remaining runway was 14 months. The pivot wasn’t a strategy; it was containment.
The Lesson:
Digital platforms in emerging markets are only as valuable as the infrastructure beneath them. If you can’t keep the machines running when the power is gone half the day, you’re not building tech. You're subsidizing a disaster.
The Market Split: Silicon Valley Infrastructure vs. African Reality
In developed markets, infrastructure is a utility; power doesn't swing. Maintenance techs arrive in hours, not days. You can treat cold storage like cloud servers—predictable, scalable, remotely managed.
In Africa, infrastructure is an active predatory variable. Countries in sub-Saharan Africa experience annual outages from 50 to 4,600 hours, which is more than half the year for some markets. When South Africa experienced rolling blackouts for 289 days in 2023, it wasn't an anomaly; it was normal.
The fundamental error in agritech capital architecture is treating physical infrastructure like software—scalable, outsourced, and predictable. In permanently turbulent markets, infrastructure isn't a line item. It's your entire moat or your entire liability.
The structural mismatch is this: VCs funded First World business models in Third World infrastructure environments. The mathematics never worked.
The Evidence Stack
$776M: Record African agritech funding in 2022, before the infrastructure reality hit
50%: Percentage of food produced in Africa that goes to waste due to inadequate cold chain infrastructure.
6-12 hours: Average daily power outages in markets like Nigeria, forcing high reliance on diesel generators.
3x higher: Cost of electricity when using backup diesel generators versus reliable grid power.
67%: Our analysis shows this is the infrastructure failure rate, with cold chain units going offline within 18 months when maintenance and power aren't controlled.