Chanzi, an introduction
Chanzi is a profitable social enterprise initiated in 2018 and established commercially in 2019, which sustainably manages domestic and commercial organic waste using black soldier fly larvae (BSFL) to convert organic waste into affordable sustainable high-quality protein for animal and fish feed and affordable organic fertiliser - effectively solving a waste management problem and creating better agro inputs. In the process they
- Address 16 of 17 SDGs.
- Address the economic challenges of waste management.
- Reduce the animal feed industry’s over dependence on environmentally ruinous fish stocks - 37% of fish end up in agricultural feed and 70 percent of global fish stocks are fully used, overused or in crisis.
- Reduce the animal feed industries over dependence on soya bean meal. Soy is the second largest contributor to deforestation globally. BSF can produce 2500 times more protein per acre per year than soy, using less water and land, limiting environmental encroachment and geographical footprint.
- Employ 60 staff – 90% are young, 50% are female. They have also developed over 100 jobs outside of their payroll.
- Avoided producing 0.4 metric tonnes of methane and 9.4 metric tonnes of CO2 per day, the equivalent to taking 642 cars off the road or planting 49,000 fully grown trees annually.
- Produce frass, (organic insect excreta, exoskeletal, and castings) 50% of which is sold to 2813 subsistence farmers to use as fertiliser, or to sell on. Being a natural fertilizer, frass doesn’t have any of the environmental ramifications on rivers, lakes and oceans that synthetic fertilisers do.
Process
Chanzi purchases / offtakes unwanted food waste from smallholder farmers, commercial farms, urban markets, and businesses, converts the food waste into protein using BSF larvae, and sells the feed protein additive to livestock, poultry and fish farmers, agrodealers, and feed mills across Tanzania and Kenya from its 4 sites in Arusha, Dar es Salaam, Zanzibar and Nairobi (opened Dec23).
Each production site has 42 greenhouses that are used to grow the larvae. There are areas for waste processing, hatchery caging for breeding, and blanching, drying and grinding. From 18 metric tonnes (MT) of food waste, 5MT of by-product is produced - after drying, it’s turned into 3MT of larvae and 2MT of fertilizer per day. Chanzi sells whole dried BSF larvae, ground BSF larvae and organic fertilizer.
Young larvae are fed a starter mixture of cereals in nursing trays and start eating immediately. The nursing trays are placed into a temperature-controlled environment until they grow large enough to start consuming any type of organic waste from food scraps to animal waste, when they are transferred to larger feeding greenhouses. As soon as they mature into 1cm grubs they are large enough to climb out of their food source and turn into the pupae ready for processing.
Impact
- Insect use as a protein source is estimated to reduce the protein cost of feed production by between 25-37.5 percent, thereby increasing affordability for smallholder farmers. 1kg of Chanzi insect protein costs c. $1.90 v. fishmeal at $4.30 and soybean meal at $2.20
- Frass is an affordable, natural and chemical free fertiliser providing a dense blend of N-P-K and minerals, ideally suited for crops, vegetables, fruits, as a soil conditioner, and for small holder farmers
- Chanzi can keep producing BSFL indefinitely without any negative consequences to the environment - it’s completely sustainable.
- BSFL have higher levels of amino acids, fat and cholesterol than other protein sources
- Replaces soya which is the 2nd largest contributor to deforestation globally. 1 acre of BSFL production gives 2500 times more protein than soya production saving thousands of trees
- Replaces fishmeal - 37% of fish caught in the wild ends up in animal feed
- Reduces pollution by reducing the amount of waste which would otherwise go to landfill
- Reduces the strain on local landfill infrastructure
Management Team
Sune Mushendwa – Founder and COO
With a degree in Architecture and a masters in Mediology, Sune has transformed his early experiments breeding black soldier fly larvae to provide a low-cost protein additive to animal and fish feeds, into a full scale highly efficient social enterprise not only benefitting local people and communities but solving significant waste issues.
Andrew Wallace – CEO
On seeing the potential benefits to low-income households, small holder farmers and corporates producing large scale waste, Andrew joined Sune shortly afterwards, and has introduced Chanzi to a wider audience, raising additional funding and enabling them to scale to 4 sites.
Tim Gable – CFO
Tim joined Sune and Andrew in 2023 and is developing the financial infrastructure, data reporting and other ERP processes to enable Chanzi to go to Series A investment fund raise in 2025/6.
Funding Sources
Chanzi’s financial sustainability is underpinned by a strategic combination of funding sources, including accelerators, venture capital, grants and partnerships.
Partners
Chanzi is a large part of the Building Circular Foods Partnership which is a collaboration of ABInBev Foundation, Unilever, P4G and Tanzania Breweries Ltd (TBL). This has resulted in $2.3 million funding enabling them to cost share the construction of 3 of their 4 waste processing facilities providing them the feedstock to scale production. It’s also created 56 new jobs, 36% of them women.
Chanzi has numerous other partners it works with dividing them into 3 categories, R&D, Waste, Off-take and Client - to innovate, create and distribute its products, including with regional and intl. partners such as Taka Taka Solutions, Hortanzia Ltd., GIZ and Wageningen University et al.
(in alphabetical order)
100+ Accelerator
https://www.100accelerator.com/en/program
Chanzi won the Better World Award which facilitated them joining Cohort 3 (2022) of the 100+ Accelerator programme providing;
- 6 months of remote programming and training
- Mentorship from an Accelerator global team champion
- Up to $100k towards pilot execution
- Participation in Demo Day enabling them to showcase their company to global investors and apply to 100+Accelerator for further funding
- Partnerships with ABinBev and Unilever both of whom have a waste management problem, guaranteeing Chanzi a long term sustainable waste offtake and profitably upcycle, and helping the corporates to achieve their commitments to the SDGs
Demo Day pitch - https://www.youtube.com/watch?v=NFc1rSHLb14
Dutch Fund for Climate and Development (DFCD) https://www.thedfcd.com/ in conjunction with WWF https://wwf.panda.org/act/wwf_scholarships_conservation_grants/
helping to develop investment ready projects in climate vulnerable areas. In 2022 Chanzi received a grant from DFCD in conjunction with WWF to conduct a detailed feasibility study to determine carbon offsets from production, ability to trade carbon credits, and additional R&D.
One area of R&D is to test out whether product contaminated with aflatoxin can be fed to BSF without the contaminants being passed through the food chain which would be a strong revelation from a food waste perspective given that aflatoxin is a huge problem with maize in the region, causing substantial food waste and health risks for consumers.
The funding also included training workshops for local waste aggregators and smallholder farmer support projects. WWF produced the following video available on YouTube https://www.youtube.com/watch?v=PdTOoXGdyIM
Finca Ventures
https://fincaventures.com/#about
As well as providing investment funding, Finca did much of the legal work to get the convertible note in place making it easier to attract other investors. Finca continue to provide business development, people support and reinvested at round 2 pre-seed investment raise.
MTI Investment
https://www.mti-investment.com/how-we-invest/
A Nordic investment and venture building company that invests in SMEs.
P4G
P4G awarded the Building Circular Food Systems partnership (of which Chanzi is a large part) $583,825 in grant funding.
Seek Impact
https://www.seekimpact.com/about-us
Family based impact investors who have also invested in fly farms in Singapore and Brisbane et al.
SMEP Programme
The Sustainable Manufacturing and Environmental Pollution (SMEP) programme established by the UK's Foreign, Commonwealth and Development Office (FCDO) implemented in partnership with the United Nations Conference on Trade and Development (UNCTAD).
Chanzi also received global recognition in 2022 being one of five finalists of the WHO UNDP Growth Stage Impact Ventures (GSIV) programme.
Potential to Scale
- Chanzi’s intention is to scale to 47 countries throughout Africa in the next 5 years, processing 1,200 tonnes waste daily with a carbon offset of 250,000 tonnes per year and directly and indirectly employing c.10,000 people – anticipated fund raise c.$17m.
- They have plans to cost share further waste processing plant construction works with other members of the 100+Accelerator program in vicinity of their operations as a means to scale whilst ensuring guaranteed waste pipeline in addition to local requirements.
- Animal production is currently constrained by high costs of feed, making up 60-70 percent of production costs. Prices continue to rise on the continent due to unavailability of alternative protein feed other than fishmeal, which is the most common protein source in conventional chicken feed and is unreliable and unsustainably harvested. However, BSFL can gain up to 5000 times their body weight in just two weeks by consuming organic waste ie. 200g of larvae will harvest 2.2 tonnes of pupae.
- Africa’s population is expected to double by 2050 to reach 2.5B people and this growth in population, alongside rising incomes, is spurring animal protein demand across the continent, with near term projected growth in consumption annually between 2-3% across major protein categories.
- There is 1.5 million MT annual chicken feed demand in Tanzania alone. The global black soldier fly market is expected to reach $3.4B by 2030 with a CAGR of 34.7 percent from 2020 to 2030.
- Chanzi have made significant additions to the management team in the form of Engineering and Entomological expertise.
- They have designed a location pre-feasibility study model to ensure new sites will be successful;
- Can the proposed site supply 18 tonnes of organic waste a day?
- Are there 2 acres of affordable land within in the vicinity of the organic waste?
- Where will the capital come from to build that particular site and solve that waste problem?
- They have also considered achieving scale through a franchise model whereby Chanzi can manage a site with their ERP systems, designs and machinery. They could entertain selling the end product through existing networks.
Chanzi fitted EfD's criteria perfectly, already successfully established with a developed business case that addresses multiple economic challenges, promotes inclusion of women and young people, benefits a broad base of small holder farmers, and has a strong experienced management team in place. Sune Mushendwa is the intellectual architect having put together the early concept and designs, and Andrew Wallace the commercial mind and public face having built several high profile partnerships with a demonstrable track record of raising external debt/equity/grant finance.
With its innovative approach, potential and intention to scale and replicate across sub-Saharan Africa, EfD's latest investee is sure to increase its impact and we are enthusiastic to support them through to series A fund raise and beyond.