YouFarm provides farmers with access to finance by getting people to invest in crops and livestock and share the profits with the farmers when the produce goes to market. It allows people who do not have access to land an opportunity to earn money by partnering up with farmers and become a part of the agricultural value chain.
The platform is now in beta testing. We are running pilot projects in South Africa. We have over 100 registered farmers and over 600 registered crop and livestock investors. We 5 active agents and 20 applications for agents. beta testing will be complete with the platform going live on or before 11 September 2020
Our target market is comprised of farmers and investors. We know that smallholder farmers produce 70% of the food consumed in Africa yet they are deemed not to be credit worthy. In South Africa we are targeting black millennial investors. According to stats SA there are 15.5m black millennials, of which 49.6% of them are employed. In South Africa Black women are the drivers of the savings and investment culture as seen by the participation in things like stokvels. There are 3.71m employed black female millennials. If we were able to get only 10% of them to invest USD1000 a year through the platform we could potentially unlock USD300m dollars worth of agricultural finance for smallholder farmers! YouFarm offers millennials an affordable alternative impact investment opportunity with options starting from as low as R200.00
Problem or Opportunity
Traditional financial institutions are not addressing the funding needs of farmers and the securities and equities markets and complex and not welcoming to low and middle-income earners.
Solution (product or service)
YouFarm provides farmers with access to collateral-free finance by getting people to invest in crops and livestock and share the profits with the farmers when the produce goes to market.
The YouFarm Crowd Farming Platform is a peer to peer lending platform that provides finance for farmers by connecting them to crop and livestock investors from across the world.
We have direct and indirect competitors. Our indirect competitors include banks, microfinance institutions, and asset management companies. Our direct competitors are Livestock Wealth Management, Fedsure, and BitFarming.
Advantages or differentiators
We believe that we are better than our competitors because we are focusing on providing finance for farmers and that our alternative impact investment platform provides a low barrier to entry for anyone that wants to begin their personal investment as there is nothing that caters to low and middle-income earners. We also believe that our agent model allows us to scale faster and to reach more farmers than any of our competitors.
We also believe that the ease of use of our platform makes investing small amounts of money from anywhere in the world easy for anyone who is looking for alternative impact investments
YouFarm has 3 revenue streams. We charge YouFarm agents and annual agency fee of R50,000.00 and we take 20% royalties from the agent's profit share for every successful project that they manage. We also take a 3% success fee from investors for every project that earns the investor a profit.
The business model is very simple. Profits are shared when the produce goes to the market. The farmers take 40% of the profits, the investors share 20% of the profits and the YouFarm Agents take 20% of the profits. YouFarm earns revenue from royalties paid by YouFarm agents, a 3% success fee charged to investors for every successful project, and annual agency fees paid by YouFarm Agents. The profit-sharing arrangement varies from project to project and the goal is to provide investors with returns that are higher than inflation and interest rates.
If a farmer requires R1000.00 to grow tomatoes, the project is placed on the platform, and funds are raised. Once the target amount is met it is deployed to the YouFarm Agents who then work with the farmer from planting all the way to harvest.
If the produce fetches R2000.00 at the market the first R1000.00 goes to the crop investors and the remaining $1000.00 is what we consider to be the profit. The farmers take R400.00, the investors share R400.00 and the YouFarm Agents take R200.00. For every successful project that generates a profit for an investor, YouFarm charges a 3% success fee and earns a 20% royalty from the Agent. In the tomato example, YouFarm Africa would earn R6 from the investors and R40 from the Agent.
Money will be spent on
The money will be spent on customer acquisition, marketing, and building a team that can help us scale so that we can get as many smallholder farmers as we can funded while we provide a world-class service to our micro impact investors.
Offer for investor
We are looking for an equity investment using a convertible note and an 18 month runway.