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AgUnity

A global technology platform connecting the last mile.

Australia
Market: Consulting, Farming, Trade, Services, Blockchain, Mobile applications
Stage of the project: Operating business

Date of last change: 16.01.2021
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Idea

A smartphone and operating system that is a technology ecosystem that provides people living in, and working with, the last mile with practical, accessible tools to connect with each other and establish effective lines of communication and an ethical, accountable means of trade.

Current Status

AgUnity is active in 8 countries including PNG, Ethiopia, Trinidad & Tobago, Sierra Leone, Kenya, Colombia, Uganda and Indonesia, and has clients including Fairtrade International, USAID, World Food Programme, Agriterra, DFID and many more. In October 2020, AgUnity secured it’s first ‘COVID-19’ contract, supporting 8 agribusinesses and 100,000 smallholder farmers in Uganda, working with Commercial Agriculture for Smallholders and Agribusinesses. We also just won 3 global tenders worth €245k with Fairtrade International, with a fourth project in the pipeline worth ~$2M AUD over 3 years. In addition to these contract wins, AgUnity has previously won AU$400,000 in contracts with NGO’s.

Market

Our target market is the 2-billion unbanked low-income smallholder farmers around the world. The majority of these farmers live in Africa, Asia and the Pacific, and these are the regions we've targeted in our first pilots. These smallholder farmers own and work on over 500 million smallholder farms in low- and middle-income countries which hold enormous potential to become more productive through the use of technology. This market is characterised by low-levels of financial inclusion, with few bank accounts or digital identity. There are also very low-levels of literacy, and limited access to technology or educational services. These communities also include marginalised women and youth, who have often lost their husbands or parents, and are ostracised or disempowered by the communities they live in.

Problem or Opportunity

Despite an estimate 95% of the world now having a minimum WCDMA/HSPA (3G) coverage, 3.4 billion people who live in these areas are unable to take advantage of technology adoption, majority of which (2-billion) rely on smallholder farming for their income. The top barrier to taking advantage of mobile coverage and technology is a lack of digital literacy, followed by affordability and a lack of relevance third (GSMA State of Mobile Internet Connectivity 2020). For those smallholder farmers living in remote areas who own a smartphone, establishing and maintaining a reliable steady connection to the telecommunications network remains a key challenge.

AgUnity’s solution addresses each of these barriers through the development of a low-cost smart phone specifically designed for low literacy users (through extensive field testing) with off-line capability. The phone can perform peer-to-peer transactions (such as “Give Harvest” or “Receive Cash”) that can be complete without signal using QR codes which can be later reconciled when signal resumes. The transactions are recorded securely using blockchain technology, which results in significantly improved transparency, confidence and trust within communities that are often characterised by low levels of governance and high levels of corruption.

In two completed pilot projects to date, wheat farmers in Kenya increased their incomes by an average of 3x from one season to the next, with cacao farmers in Papua New Guinea achieving similar results. The ability to achieve this substantial rise in income was simply by getting farmers to cooperate to share equipment, plan farming activities, and buy and sell together as part of a farming co-operative. The cooperation between farmers and farming co-operatives was only possible however, with the assurance to farmers that, for any transactions occurring between them and the co-operative, there would be an immutable record created that no one, not the farmer, the co-operative or even AgUnity, can alter, and that everyone’s record is identical. Once the farmers felt assured that they would not be cheated, they began to trust each other enough to work together, and the significant results followed shortly thereafter.

Further validation has been achieved in recently completed / ongoing pilots in Ethiopia, Sierra Leone, and Papua New Guinea. Participating supply actors who were initially skeptical, that once using the solution were then convinced that the data could be reliably recorded (even while offline), and that the data was immutable through being secured on the blockchain, became keen on developing new cooperation that previously "felt impossible."

AgUnity also demonstrated a willingness to pay, with coffee smallholders in Ethiopia agreeing to purchase phone for 75USD (on a payment plan) and pay for an annual subscription fee, proving it a viable B2C business model.

Solution (product or service)

In the AgUnity System every person has their own phone which provides their identity, wallet and record of all their transactions. This allows smallholder farmers to collaborate and transact with a level of confidence that has never existed before.

Additionally, the AgUnity application is essentially a social and financial network as well as a platform for delivering other 3rd party applications into these remote communities. Beyond recording basic farm records, the AgUnity platform allows for the deployment of hundreds of other applets for a variety of purposes (including Microfinance, Crop Insurance, Banking etc.). These means that there is no limit to the number of services that can be provided to this population once they, with the help of the AgUnity application, become connected.

Competitors

AgUnity's approach is unique because we are leveraging three separate technological advances that have never previously been seen in modern society: mass telecommunications coverage; cheap smartphone devices; and distributed ledger technology (a.k.a. Blockchain).

As such, we have no known direct competitors, first-movers advantage, combined with a unique skill set in startups, technology, finance and agriculture. We already have a working and in-use mobile and web application, the AgUnity App, designed to work offline and for remote and rural communities, four completed pilot projects, with 9 more in progress.

Some of our indirect competitors (operating in a similar space but with different products) include FarmForce, WeFarm, and M-Farm.

Advantages or differentiators

We differ because we offer our users banking and transaction facilitation, traceability and transparency, access to markets and trade brokerage facilitation as well as data analytics, GPS and tools to improve yields. This makes our product extremely relevant and functional for smallholder farmers while all of our indirect competitors offer only one of these four features. Additionally, no other business is connecting those who do not yet own a smartphone, which is the vast majority of our target market.

We have also developed strategic partnerships to provide smallholder farmers with ethical goods and services such as solar lighting, microloans, and essential products. My Sundaya are based out of Indonesia and do modular, plug-and-play solar kits for rural communities, and Kopernik supplies fuel-efficient cookstoves and low-cost water filters, while Masen has previously helped develop a Malaria-tracking app plug-in. We have also been recognised for our innovative approach in publications by IFC Worldbank, UN Food and Agriculture Organisation (FAO), Mastercard Foundation and Oxford University.

Finance

In the early stages of company growth, it is anticipated the majority of revenue will come from consulting and licensing fees which fund our software development costs before moving further towards the subscription and transaction fee model. In the next five years we expect to have millions of farmers using our smartphones and platform spanning across upwards of 30 countries. Our anticipated revenue streams include:

Consulting Fees: These fees consist of software development for custom versions of the AgUnity App (typical contract size of USD$50k-200k).

Subscription Fees: Service Providers using the AgUnity App for their clients are charged $1 USD per user per month. In cases of grants or NGOs, the monthly Subscription Fee may be deferred for a period of up to 12 months to enable a community to access the app, begin generating better incomes and subsequently have an ability to pay after the period of deferment.

Banking Transaction Fees: App users are charged a small fee (USD$0.1) for each peer-to-peer transaction completed on the platform (similar to M-Pesa).

Shopping Purchase Facilitation Fees: App users will make online purchases on the platform with a small fee charged on each transaction (similar to Amazon).

Micro-finance Facilitation Fees: AgUnity will connect smallholder farmers with micro-finance providers and provide the necessary proof of farmer income history and ID via its platform. AgUnity will receive a small percentage of the interest repayments from the provider for this service.

Marketplace / Commodity Transaction Brokerage: AgUnity will facilitate the transaction between cooperative and commodity buyer and will receive a small percentage of the transaction value in return.

Data Fees: Data fees are yet to be projected as part of our business model, as we anticipate our understanding on the value and application of this data to significantly evolve over the coming 3-5 years. We are also very mindful of ensuring that farmer’s data isn’t exploited. As such, we will continue to investigate the potential for commercialisation of data, the impacts on Last Mile communities and how to ensure an ethical approach is guaranteed.

Business model

AgUnity's business strategy moves through a phased approach to reaching scale among low-income, smallholder farmers in emerging markets.

The first phase is undertaking a B2B model, providing technology services to Commodity Buyers, NGOs, Banks, and other 'Service Providers'. For example, AgUnity has a contract with Fairtrade International, delivering an app to help their farmers earn a 'Living Income'. Fairtrade works with over 1.5M farmers worldwide. AgUnity also works with WFP, USAID, GIZ and more.

The second phase is a B2C approach, where AgUnity uses these existing relationships and established projects to begin direct marketing to farmers and co-operatives, leading to scale.

Money will be spent on

Software development runway – $1,500,000
Business Operations – $200,000
Business Development and Partnership Support – $3,100,000
Research and Development – $200,000

Offer for investor

To be confirmed

Risks

Since our customers live in low- and middle-income countries, we face significant geopolitical risk in many of our target markets. We mitigate this by working in a number of different countries so that we are not significantly impacted if we must avoid working in one specific country for a period of time.

Incubation/Acceleration programs accomplishment

In 2017 AgUnity participated in the Sprout X accelerator program which is based in Melbourne, Australia.

Won the competition and other awards

AgUnity has won numerous awards including the prestigious 'Global Agripreneur of the Year' award by Future Agro Challenge in 2018, FinJam London (2016), FinSum Tokyo (2016), Tech4Farmers 2.0 Asia Challenge (2017), FAC Australia (2017), Mekong Agritech Challenge (2017), Global Forum on Innovations in Agriculture (2018), Finext Awards Singapore (2019), World Blockchain Summit (2019), BBVA’s Open Talent Award for Sustainability (2019) and has been runner-up at Investible Games Melbourne (2019). Additionally, late in 2020 AgUnity was crowned the winner of Startup Avalanche run by Techsylvania in partnership with Risky Business, resulting in an investment of €200,000 in AgUnity, including in kind tech support of €50,000.

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