It’s been a while since I last blogged about the work we are doing so I thought I would share our progress with you. Our mission at YouFarm has always been to change the way agricultural finance is done in Africa. It has not been an easy journey. We are 3 years into becoming an overnight success and along this journey we have made many mistakes but we made sure that we learned from them.
A lot has happened since I last posted. We decided to move from Zimbabwe to South Africa after getting accepted into the Startupbootcamp Afritech Accelerator program. It was an amazing experience and it helped us scale into a new country.
When we started we were naive and optimistic. We thought that we knew it all and that we had created a great business model that we thought would uplift Zimbabwean farmers and survive the fluid Zimbabwean economy. Validation came in the form of support from early crop investors, the agricultural community and a global impact investor who offered us USD200,000 for a 20% stake in the company. Things were looking good!
We turned down the investment offer because the investor wanted to give us the money in Zimbabwe’s local currency, as they had funds in the country from their other projects that they could not get out of the country. At that time, the black market exchange rate had started running. At one point I remember when the rate increased by 100% in the space of a week. Had we accepted the deal a week earlier, the money would have lost half its value. I knew nothing about buying forex on the black market and I did not want to take the risk of keeping that sort of cash in person.
Sometimes I wish I had taken that offer. Not only would we have had a great global partner to work with but I would have had money to keep my team going, as I had been paying them from my own pocket. While they shared my vision, their bills and other financial obligations did not and ultimately they moved on.
Learning from mistakes
We ran 5 pilot projects in Zimbabwe, 2 were very successful with the mushroom project seeing investors getting great returns. 3 did not work out because of the challenges of running a business in Zimbabwe.
There was one common denominator in the 3 failed pilots. US! We were trying to do everything from providing the finance, to managing the farmers, to providing extension services. We ended up over stretching ourselves as opposed to focusing on one thing and doing it well. Imagine doing all these things in Zimbabwe where you also have to factor in exchange rates, hyperinflation and time spent looking for fuel. It’s a recipe for disaster. Add to that, we were a startup so there was no support from banks or angel investors.
In a hyper inflationary environment, decisions cannot be made slowly. In the case of our first livestock project, it took a committee 3 weeks to agree on a start date for the project. They had signed all the contracts but there were disagreements. While we waited for them to resolve their issues the price of inputs tripled.
The last project failed because input suppliers started charging in United States dollars and fuel became almost impossible to get resulting in post harvest losses. 6 months of hard work went down the drain after we could not get produce to market.
Global COVID-19 Pandemic and it’s effects
We have learnt a great deal from these mistakes and we hope never to repeat them again. After going through the Startupbootcamp Accelerator program we were ready to launch our first pilot program in South Africa. The farmers were lined up and everything was ready to go. Then disaster struck. COVID-19!
A week before our pilot was supposed to launch, South Africa implemented a lockdown in effort to curb the spread of the Coronavirus. We told ourselves that this was a temporary setback and that things would be back to normal after 2-3 weeks. How wrong we were! We didn’t have a plan for a global pandemic. As the local and global numbers of people who were infected started going up, reality started to set in. We realised that things had changed forever!
We were faced with a massive problem. How were we going to inspect farms, manage farmers and provide extension services if we couldn’t travel and get to them? If we didn’t find a solution to this then our business was dead!
The solution to our problem came from looking at our past mistakes and learning from them. You are only as strong as your weakest link. Our weakest link had been the ability to manage multiple farmers and provide extension services to all farmers while operating on a shoestring budget. We realised that instead of trying to do everything, we needed to focus on providing a platform that allows people to invest in crops and livestock and share the profits with the farmers when the produce goes to market and leave the management of farmers to the experts.
This is how the YouFarm Franchisee model was born. Franchisees are independent operators and entrepreneurs who live in farming communities. Their job is to identify farmers who need funding and manage those farmers from planting all the way to harvest. This has profoundly changed the way we now operate. We can now scale faster and reach more farmers.
Meet Lerato and Mpundu
Lerato is a 23 year old entrepreneur from Taung in Northwest Province in South Africa. She was raised by her grandfather who is a farmer. Seeing him struggle to get finance is what made her decide to become a YouFarm Franchisee in Taung. She has partnered with an experienced Agronomist and they are now working with several farmers in Taung who produce lucerne grass. These farmers are in need of funding and Lerato is determined to make sure that they get it by getting them onto the YouFarm Crowd Farming Platform. YouFarm managed to partner with a franchisees in South Africa!
In Zambia, we recently launched our first Southern African project for broiler chickens. We are proud and excited. The project is managed by Mpundu our franchisee in Zambia. Mpundu is supporting a farmer who has a contract to produce 12,000 chickens per month and requires finance in order to fulfill this contract. This project has an ROI of 5.69% after 6 weeks. Not too bad if you ask me. For more details on how to invest in this project download the prospectus here.
We are currently on boarding franchisees in Namibia and Uganda so you can expect exciting projects from those countries soon.
We have a lot of exciting projects coming soon. Follow us on Twitter . Like us and follow us on Facebook or visit our website www.youfarm.africa. If you have any questions about how you can invest or how you can become a franchisee and support farmers in your community feel free to email us firstname.lastname@example.org