A Ugandan food maker that buys crops from more than 3,000 smallholder farmers has just secured fresh growth capital. It comes from a new fund built to back exactly this kind of business.
AgDevCo Ventures, the early-stage arm of the agricultural investor AgDevCo, has put $3 million into Newman’s as a mezzanine loan. Newman’s will use it to expand production, buy more from farmers and reach more customers in Uganda and, in time, nearby markets. The size is notable. It sits at the top of the fund’s $1 million to $3 million cheque range.
Newman’s is a locally owned agro-processor run by Managing Director Ssegujja Nasser. It turns Ugandan crops into packaged food and snacks, and it packs and sells fresh fruit and vegetables. Its products reach consumers through thousands of formal and informal shops. The company began in 2013 by sourcing, packing and exporting fresh produce. In 2017 it moved into processing, starting with chillies, then adding potato and cassava crisps and seed and nut mixes. In 2022 the Yield Uganda Investment Fund, run by Pearl Capital Partners, backed it with equity and quasi-equity. That earlier round funded a new processing plant and better packaging.
A mezzanine loan sits between ordinary bank debt and equity. It costs more than a bank loan, but the founder keeps ownership. It suits a firm that already sells well and needs money to grow faster. The money has to be repaid, so the business needs steady cash flow to carry it.
The lender is worth a closer look. AgDevCo Ventures reached a $49 million first close in August 2026. It aims to put $1 million to $3 million into farming and agri-processing small and medium-sized enterprises (SMEs) in East Africa. Its backers are stacked in layers, and each layer takes losses in a set order.
| Layer | Source | Amount |
|---|---|---|
| First loss. | AgDevCo equity, from UK FCDO funds. | $28M. |
| Second. | IFAD subordinated debt. | $10M. |
| Senior. | Isenberg Foundation-led lenders. | $11.25M. |
The first-loss layer is the key. Because UK-funded equity absorbs losses first, the other lenders feel safer. That lets the fund take on young, higher-risk companies that banks often turn away. The fund also pairs money with technical help, and it plans to favour Black African-owned and women-owned businesses.
Some simple sums put the deal in context. These are our own, using public figures. A $3 million cheque is about 6% of the $49 million first close. At the stated ticket sizes, the full fund could back roughly 16 to 49 companies, before fees and costs. Over ten years, the fund aims to reach more than 128,000 smallholder farmers and create about 2,900 jobs. Newman’s own network of over 3,000 farmers is about 2% of that farmer target. The fund said in August that it expected to announce its first investments later in 2026.
Both sides spoke warmly about the deal. Christine Mwangi, who heads AgDevCo Ventures, called Newman’s “a locally owned business with deep roots in Ugandan farming communities.” Nasser called the money “a vote of confidence in what Ugandan farmers and a Ugandan brand can build together.” He said it gives the company the capacity to meet growing demand and buy more from the farmers who supply it.
Why it matters: Africa grows a great deal of food but processes too little of it. Crops that are not processed or stored well can spoil before they reach buyers, and farmers lose income. A processor that pays farmers on time and buys more of their produce solves two problems at once. Funds like this one also fill a gap. The $1 million to $3 million range is too big for most grants and too small for many development banks. For African founders, the lesson is plain. A firm with years of sales, a loyal farmer base and a clear plan to scale can win patient, flexible capital without giving up equity.
What to watch next: how fast Newman’s lifts output and how much more it buys from farmers. Also watch whether it enters Kenya, Rwanda or other nearby markets. The next test is the fund itself. Watch which companies get its next cheques, and whether it reaches women-owned and smaller-town businesses as promised.
Sources: Africa Private Equity News on AgDevCo Ventures’ mezzanine loan to Newman’s; Launch Base Africa on AgDevCo Ventures’ $49M first close; Deal Street on the $49M first close; Africa Private Equity News on Pearl Capital Partners’ 2022 backing of Newman Foods; Food Business Africa on the Yield Fund investment; How We Made It In Africa on Newman Foods.
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