Empower the local farmer. ICTApplications'17 By GO Empowered by...

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1 Empower the local farmer ICTApplications'17 By GO Empowered by...

2 Our mission: Maximize harvest and grow financially...empower the local farmer! Maximize its harvest Optimize its activities Increase its revenues Improve stakeholders data availability 2

3 Major problems of farmers How can I pay for fertilizer and seeds? When and how should I use my fertilizer? Lack of knowledge in modern farming Can I negotiate a better price? Zero agriculture business understanding Three major problems of farmers No access to reliable information How is the weather going to be? At which price will I gain something out of my harvest? 3

4 Deep dive into farmers' problems Problem A Low use of input B Low commercialization C Vulnerability to weather related shocks D Lack of value addition E Barriers to exporting Description Possible reasons Overall low use of inputs including machines, fertilizers, pesticides and seeds Lack of knowledge and skills Low quality of products Lack of adequate business skills including lack of understanding of finance Lack of business understanding Major causes are lack of irrigation and weak meteorological skills No access to reliable information Still high potential for value addition Poor rural infrastructure Lack of loan possibilities for farmers Undeveloped agricultural infrastructure Main reasons are high rural transportation costs and poor marketing skills High rural transport costs Farming specific High Low AgriGO's focus Source: Institute of Policy Analysis and Research Rwanda; AgriGo

5 Trend in Climate Change Climate Change Direct consequences Implications for farming AgriGO's solution 1) Temperature increase 2) Change in rainfall patterns Rising temperature implicates higher possibility for droughts and increase of spread of pests and diseases Change in rainfall patterns increases the number of floods and landslides Change of best farming practices (e.g. change in temperature is leading to watering adjustments) High importance of using right pesticides to avoid pests and diseases Strong need for reliable weather forecasts Provision of startof-the art farming practices Education about needed adjustments due to climate change (e.g. usage of different seeds) Communication of breaking news (e.g. weather warning) "Reliant on rain-fed agriculture, Rwanda is highly vulnerable to climate change." New Agriculturist (2012)

6 AgriGO's solution Digital Agriculture-Ecosystem Companies and institutions: Provision of content and receiving data AgriGO: Data processing and management Farmers: Receiving relevant and individualized content AgriGO creates a Digital Agriculture-Ecosystem by including all relevant stakeholder Financial opportunities provided by banks Best farming practices provided by RAB 1) Weather forecasts provided by Meteo Rwanda New products provided by AgroDealers 1) Rwanda Agriculture Board 6

7 Technology AgriGO platform/server Account for farmers Push SMS Farmers Push SMS USSD technology Management platform for companies and institutions Database of all collected information for farmers (e.g. best farming practices or market prices) No need of a smartphone or internet connection!!! It is 4 weeks, since you planted 20 kg of maize, it is time to add 100 kg fertilizer of DAP to keep yield very high. Excess of fertilizer affects quality of tubers and lowers the specific gravity... Telecom integration (USSD) Revenue stream B2B (fee for management platform and push SMS to farmers) Revenue stream B2C (fee for content on demand) 7

8 AgriGO's financial impact Farming value chain Farmers need Input Loans from banks Production Insurance opportunities Selling Saving opportunities Farmers situation "Vison 2020", Financial Inclusion [%] 48% % % 89% 90% ) 2020 Province Kigali Southern Western Northern Eastern Lack of formal inclusion in rural areas (data from 2012) Access to commercial bank 53.2% 16.2% 21.5% 15.4% 16.6% Formally fin. included 66.1% 36.0% 37.4% 37.2% 41.1% Most of the population of the rural area has only access to basic financial services AgriGO's impact A Farmer digital profile B Financial education C Financial data-driven decision 1) Strong growth mainly driven by mobile money platforms, SACCOS, insurance and MFIs; non-bank institutions being the largest drivers 8 Source: National Bank of Rwanda; FinScope Survey 2012 and 2016; AFI Case Study U-SACCO; AgriGO

9 Our uniqueness Information (e.g. market prices) Functions Farmer advisory Companies and institutions Client focus Farmers AgriGO's comprehensive approach to include all stakeholders sets itself apart from its competitors M-Ahwi Bankable farmer 9

10 AgriGO's market Addressable market for AgriGO (B2C) [# in m] Share of agriculture (Rwandan economy) [%] c.9 m 80% of farmers are smallholder farmers c.8 m 50% mobile phone penetration rate (upward trend) c.4 m Other industries Agriculture 1 33% % Theoretical market for AgriGO Total number of smallholder farmers 4 Total addressable market for AgriGO Total number of smallholder farmers with a mobile phone Addressable market for AgriGO With a share of 39%, the agriculture industry contributes c. 2.5 billion USD to the Rwandan GDP Large growing potential through expansion into further Sub-Saharan African Countries 10

11 Core team, network and partners Management team (+ 4 more Software Developer in GO Ltd.) Shikama Dioscore Patrick Byishimo Anthere Niyiguha Manuel Almagro Founder and CEO Software Developer Agronomist Advisor Business Development B.Sc. Botany/Plant Biology and Conservation (cand.) B.Sc. IT- Networking Ao in RDA (Rural Development and Agribusiness) B.Sc. Business Engineering and Management Founding member at Rwanda young ICT Entrepreneurs Association Best Program Promoter of Business Development Center Rwanda Several projects in Web Design for SMEs Member of klab, Kigali Site manager of VUP, Gicumbi Supervisor of Project of AEBR/CFGB Program (Canadian Food Grain Bank), Gahara and Mahama Strategy Consulting at Roland Berger, Munich (Germany) Venture Capital and Private Equity at SHS Tuebingen, Tuebingen (Germany) Network Corporate partner Union pour Développement Integré Ltd. (UDI) 11

12 AgriGO's network Current partner Company Public institution NGO Union pour Développement Integré Ltd. (UDI) Targeted partner

13 Our next step: Pilot phase Coming soon: Pilot phase planned from March to August Plan Pilot farmer network Introduce AgriGO service to 5,000 farmers and 2 companies 500 farmers are planned to actively interact with the system Inclusion of our partners for content creation # 4000 # 1000 Union pour Développement Integré Ltd. (UDI) Farmers [#] Musanze Nyamasheke

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16 AgriGO's revenue streams can be divided into B2C and B2B business AgriGO's portfolio B2C B2B Content on Content on A demand for B demand for user C Management D Internal push E External push F account holder without account platform content content Data analytics Description > Only farmers can create an AgriGO account > Account holder get every season free general farming tips and weather forecasts > For further content account holder need to pay > Collected data from AgriGO database can be provided on request to farmers and also to nonfarmers (non-account holder) > Higher price charged for non-account holder > Management platform for cooperatives, companies, NGO's and public institutions > Management of members, e.g. members of a cooperative > Account holder of management platforms can send members of their network SMS > Farmers from AgriGOs network can be contacted > Surplus is charged for farmers that are not in own network > Companies/institutions without own management platform can push content > Collected data from AgriGO can be leveraged to create valuable statistics about the agriculture industry Services Planned revenues 2019 (share) > Best farming practices for different crops > Market prices and prices for substitute goods for different cops > Profitability analysis of different crops > Financial opportunities including saving and credit possibilities 33% > Detailed weather report > Market opportunities to sell harvest > Database of all members > Profiling of members > Internal and external reports > Data provision on real-time basis > Communication interface to members (see push content) > Internal push content can for example include reminder to members, best farming practices, internal news etc. (highly depends on account holders purpose) > External push content can include push advertisements about new products, financial possibilities, new policies, surveys etc. > Different statistics about provinces/districts, crops etc. > Data analytics about specific trends in the agriculture indusrty 7% 49% 1% 10% Start from

17 AgriGO's market potential in Rwanda adds up to yearly M USD for current revenue streams Calculation of market potential (simplified) 1) Market potential (yearly) 1) 1 Content on demand AgriGO account holder[#] AgriGO user (non-farmer) [#] Assumptions (per season) Avg. number of requests [#] Price per request [$] Avg. number of requests [#] Price per request [$] No. account holder: 4M No. user (non-farmer): 0.3M Requests farmer: 30 Requests non-farmer: 15 Price farmer: 0.01 $ Price non-farmer: 0.05$ 2.85 M USD B2C market potential 2 Management platform Accounts for heavy.users [#] Acc. for non-heavy users[#] Price heavy user [$] Price non-heavy user [$] 3 Push content Number of internal pushs [#] Number of external pushs [#] Price internal push [$] Price external push [$] B2B market potential Number of accounts is sum of: No. cooperatives: 5000 No. companies: 100 No. NGOs: 30 No. public institutions: 40 Penetration rate heavy users: 30% Price heavy user: 3000 $ Price non-heavy user: 700 $ No. internal pushs: 8.4 M No. external pushs: 5 M Avg. price internal: $ Avg. price external: $ M USD M USD B2C market B2B market 1) Data analytics excluded 17

18 Revenues are expected to reach 768 k $ until 2019 Large growth potential through data analytics Revenue split [USD k] Detail revenue split for 2019/2 [USD k] Management platform Push content Farmer External push Internal push 10% Management 1% platform (non-heavy user) 18% 33% Content on demand for account holder /1 1) 2017/2 2018/1 2018/2 2019/1 2019/ % Management platform (heavy-user) 7% Content on demand for non-account holder 1) 2) 3) AgriGO user [#] Number of requests [#] Price per request [$] Management accounts [#] Fee per account [$] Push content campaigns [#] Farmers contacted [#] Fee per farmer [$] AgriGO's main revenue streams Continuing strong growth planned after 2019 by leveraging large farmer network through data analytics 1) Only small revenues planned in pilot phase 18

19 In 2021, main revenue stream comes from data analytics Leveraging of large farmer network Share of revenues from [%] (Illustrative) 10% 90% 10% 20% 70% 20% 30% 50% 50% 50% 60% 40% Data analytics Management platform 1) Farmer advisory revenues by advisory Start of expansion into further countries size of farmer network Vision 2021 Vision 2021 Main revenue stream generated by data analytics Main customers will be financial institutions, insurances, NGOs and public institutions Large potential for new business models and customers Through large farmer network push notifications and education about products will still generate a significant share of revenues Second revenue stream comes from management platform Global network of empowered farmers using AgriGO services for free (already from 2020) Direct communication and exchange of experience amongst farmers planned 1) Including communication (e.g. push important notification) 19

20 In the first 3 years AgriGO's farmer network is planned to grow up to 1,000,000 farmers 2017/1 2017/2 2018/1 2018/2 2019/1 2019/2 Farmer network [#] Crops in our database [#] Total SMS sent [#] Total revenues [USD] Partnerships [#] Corporate clients [#] Employees [#] 5,000 20,000 40, , ,000 1,000, ,00 3,000,000 11,000,000 57,000, ,000, ,000,000 9,000 26, , , , , /1 2017/2 2018/1 2018/2 2019/1 2019/2 20

21 Costs for the first year (including the pilot phase of 7 months) will be $ Share of total costs [%] 61% 21% 8% 3% 8% Personnel Technology Office Marketing Transportation Investment in fixed assets Variable Fix Total Personnel costs include CEO Senior Developer Agronomist Advisor Business Developer Technology costs include Server Hosting (fix) SMS Gateway (fixed asset) USSD Shortcuts (fix) SMS push content (variable) With growing customers costs for Transportation and SMS push content will increase After a critical quantity of customers is reached, costs for Server Hosting will increase (capacity for ~ farmers) Further personnel recruitments are planned after the first year 21