Meet the Entrepreneur: Andrew Wallace, Chanzi
At FINCA Ventures, we look for entrepreneurs leveraging market-based solutions to create large-scale, lasting social impact. In this series, “Meet the Entrepreneur,” we take you into the minds of the intrepid leaders at our portfolio companies who boldly venture into markets in need of positive disruption.
Waste management is a challenge for countries across sub-Saharan Africa. More than 90 percent of waste generated in Africa ends up in uncontrolled dumpsites and landfills which generate greenhouse gases through open burning or anaerobic decomposition of the waste.
An exciting alternative to dumps and landfills is using black soldier flies to turn organic waste from cities and agri-businesses into a protein additive for animal feed and organic fertilizer. The process is self-sustaining and cost-effective. In this interview, we speak with Andrew Wallace, co-founder of Chanzi, to learn more about the benefits of working with black soldier flies (BSF) and the problems that he and his team are working to solve.
Tell us a bit about your background and how your work at Victory Farms prepared you for launching Chanzi?
Andrew: I always knew I wanted to start my own business. I did two years each at an SME, a multinational, a parastatal, and a startup (Victory Farms). Without a doubt, my experience at Victory Farms in Kenya was the most invigorating and interesting because I got to see the impact I as an individual was making, rather than just feeling like a cog in a big machine.
As for the more technical skills that I learned at Victory Farms while serving as Operations Director, there are a lot of similarities between farming different forms of livestock. It’s all about implementing standard operating procedures. We were able to carry this into insect farming.
So did Chanzi come out of your desire to start your own company, or did it take the chance meeting with Sune Mushendwa, your co-founder?
It’s a little bit different. I believe that most people, me included, are often afraid to actually make that jump. The truth is, I didn’t jump, I was pushed. I was stuck in Tanzania at the beginning of 2020 as a result of the Covid-19 lockdowns. I couldn’t get back to Kenya. I needed to do something with myself. I was sitting on a beach twiddling my thumbs and thinking “what am I going to do with my life?”
At that time, Sune had already made some steps in the right direction, and so I decided to join him and get this business going. I knew nothing about insects at the time, but Sune was convinced that I knew what I was talking about and allowed me to take the reins.
How did you and Sune originally cross paths?
Andrew: We met doing triathlons many years ago but didn’t have much dialogue until we were both waiting to exchange money at a bank in 2019. I had recently started a trial feeding insect protein to fish at Victory Farms and the trial was going very well. The fish that were fed an insect protein diet were 23% heavier than the control, gains that are unheard of.
When those results came out, I reached back out to Sune and asked if there was any way I could get involved as Sune had been doing his own trial on farming black soldier flies. The following year, the Covid-19 lockdown started, which led me to getting back in touch with Sune.
The rest is history.
Let’s talk about black soldier flies. How did Sune take a model that was developed in Europe context and contextualize a solution for Africa?
Andrew: Sune was looking closely at what was going on in the BSF world in Europe and found that they were spending vast sums of money solving three problems that didn’t need to be solved in Africa. In Europe labor is expensive, so they automated. Land is expensive, so they went vertical. Finally, at least part of the year it was too cold outside, so they had to invest in climate control and insulation. Sune realized that we didn’t need to sink money into any of that.
Sune designed a model for farming insects that was applicable to the African context. The remit for our in-house engineering department is to design, fabricate, and maintain everything locally. It’s made Chanzi a truly African method of growing insects and it is a model we can then roll out continentally.
You guys are solving two problems at once. You’re solving a waste management problem and creating a better agro input. Which solution drives you the most?
Andrew: The great reason to work at Chanzi is that every employee has their own intrinsic motivator. For me it’s mostly about waste management. Africa and the rest of the world has a waste problem, and it’s not going anywhere. Gone are the days where digging a hole and sticking waste in it is a viable solution. We need to find a way of reusing waste and extracting value from it. For me, BSF is a profitable way of converting what is an awful problem into a solution.
As for Sune, he’s inspired to find a solution to overfishing. 36% of fish caught globally goes to feeding the animals that we eat. Sune is a vegetarian, but his not eating fish won’t make any difference on its own. He needed to find a viable alternative to overfishing. Over 80% of fish stocks are overfished or threatened or near extinct.
We also are producing an alternative product to soya. Soya production, mostly for livestock feed, is the second biggest contributor to deforestation globally. At Chanzi, we produce 2,500 times more protein per acre than a soya farm because we’re farming in a very intensive and efficient way. So we’re also directly contributing to solving our deforestation problem.
And there are numerous other issues. What happens to organic waste when you take it to landfill? Well, it breaks down into methane gas which is about 34 times worse than carbon dioxide as a greenhouse gas. So, we’ve got that carbon offset element as well. We’re also creating jobs, employing dozens of people in each aspect of our business. Finally, we are producing a natural fertilizer. Synthetic fertilizers have huge ramifications on rivers, lakes and oceans.
Where do you usually start when trying to identify a location for a site?
Andrew: Before we go into an area, we do a pre-feasibility study with three essential questions. First, where are we going to get eighteen tons of organic waste a day? Second, where can we find two acres of land in the vicinity of the organic waste? Finally, where are we going to get the capital to build that site and solve that waste problem?
After you get the Nairobi facility up and running, how are you thinking about expansion in the short-term?
Andrew: We could look at expansion through a franchise model. The franchise model is just another way of proving that we can manage a site remotely with our systems, designs, and machinery. And in certain cases, we might to take their product off them and sell that through our networks. But mostly it is another way to pressure test our multi-site location model.
Tell me about the Better World Award through the 100+ Accelerator that you won in 2022. How did that partnership help you to scale up, and who are some of the partners that you’ve worked with through it?
Andrew: The cash injection from Better World came at an especially valuable time for our business and gave us the breathing space to do our seed round capital raise. In addition, it allowed us to build a relationship with AB InBev and Unilever. The companies have said that they need to innovate to solve global issues. And they’ve reached out to the startup world and said, look, you guys are inherently innovative. Innovation is messy, and you guys don’t mind getting your hands dirty. Innovation is littered with mistakes, and you guys don’t seem to mind making mistakes. So, they’ve thrown their weight behind Chanzi.
What have you done already with AB InBev and Unilever?
Andrew: Both of those companies have a waste management problem. They produce waste through the brewing or manufacturing process that they struggle to get rid of. What Chanzi can do is construct facilities in the vicinity of their factories and guarantee a long-term sustainable waste offtake and profitably upcycle it. It saves them money as they don’t have to pay for waste disposal, and it’s great for their commitment to the SDGs. It’s great for Chanzi in terms of getting access to the waste that we need.
Imagine you’re making headlines five years from now. What would that headline be and why is this important to you?
Andrew: When I read articles that that World Bank has invested $25 million into a landfill, I wonder why we are still doing that. For a tenth the cost, we could solve a waste problem for over a million people. I’d like the headline to be that Chanzi has created a sea change in how the world views waste. We’ll be proving that only a fraction of a percent of waste needs to end up in landfill, something we’re already proving in cities like Arusha, Dar Es Salaam and Nairobi.
Our long-term goal is to create a model that we can take to every town and ensure that they no longer send any waste to landfill. It should be the solution that organizations like the World Bank look to when it comes to managing waste and gets them out of thinking, “let’s dig another hole.”
Why were you excited to have FINCA Ventures come on-board as an investor?
Andrew: FINCA was a huge catalyst in our seed round. The cash prize that came with the Better World Awards gave us the breathing space to be selective about the investors that we wanted in the seed round. FINCA was near the top of our short list. A lot of what they were trying to do rang true. FINCA’s values, ambition, and drive very much aligned with ours. They helped get the ball rolling by doing a lot of the legwork for getting our convertible note in place and made it a lot easier for us to attract other investors. In addition, FINCA is constantly looking at ways to develop us as a business and to develop me as an entrepreneur.