How NGOs can partner with a Rwandan AgTech Start-Up to grow farmers incomes

Shambapro is a young ambitious AgTech start-up with a revolutionary vision for agribusiness of helping farmers in Africa grow sustainable incomes from their farms using existing practical knowledge and skills, big data and predictive analytics.

Since entering the market in 2019, the young company has registered initial success in creating a prototype and testing its solution with farmers in Rwanda, obtaining early customers, getting repeat customers and referral sales and obtaining very crucial feedback on how to best adjust the product to suit farmers needs better.

At Shambapro, our vision is to help small and medium scale farmers build and run profitable farm businesses across Africa, beginning in Rwanda. As the team leader, I have funded the business through bootstrapping in our early days but with additional support in form of non-equity assistance from local and international partners like 250 StartUps , MEST Africa, Make-IT in Africa and FastTrackTech Startups and supportive farm input suppliers like Holland Greentech Rwanda.

Still, we are hard pressed to seek external funding and other resources to help us increase our traction, improve or iterate our product further to achieve the famed product-market fit and to scale to other markets. Our vision is daring, our execution challenging but very interesting, and our journey, a punishing but thrilling task for which we cannot complain because we knew exactly what we asked for by choosing to tread the path that we are on.

Why Rwanda?

Rwanda provides an interesting challenge. It is a relatively smaller market compared to other countries in the region that has put 100% commitment in creation of knowledge-based economy and much more directly seeks to support tech innovation. It has also established itself a proof of concept country which Hans Stoisser, a management consultant with long experience in emerging countries explains in his blog In search of new markets? – Rwanda, the “proof-of-concept-country”

The aim is to build a technology base with investment such as the Kigali Innovation City for start-ups to test and prove their business models and contribute locally while acting as a springboard to other African markets like the way Kasha or Zipline have done.

My own extensive experience and passion for working to solve problems of small scale farmers in Rwanda over the last decade and the existing environment for innovation makes Rwanda the natural choice for us as a maiden market.

Our solutions for farmers

We understand that farmers, on top of existing public and private initiatives, need improved access to quality affordable farm inputs like seeds, fertilizers and crop protection products. They also need technical farming advice and practical skills, better access to good markets and suitable financing for agriculture that recognizes its seasonal nature, depends on produce as collateral and recognizes the importance of agriculture insurance.

Since 2019, we have built a hybrid farm input ordering platform in Rwanda which farmers can access through the internet, WhatsApp, call and text message and a physical farmers shop. Our e-platform at shampapro.com has processed hundreds of orders from rural and urban clients who are keen to get into or improve their agriculture ventures especially in the ‘new normal’ caused by Covid-19.

Our first farmers shop in Kayonza town in Rwanda’s Eastern province has served hundreds of farmers since its launch in April 2020 in the early challenging days of the Covid-19 lockdown and has given us crucial lessons of the gaps that farmers think that our solution can help them fill to help them be more successful in their farm enterprises. We have used and continue to use our Facebook, Twitter and WhatsApp accounts to handle customer inquiries, take and fulfil orders across the country.

One of our proudest moments is when a primary school teacher and farmer reached to us on Facebook from a remote sector of Nyamasheke district in Rwanda’s western province in August 2020 to order hybrid tomato seeds, paid in advance by mobile money and received his order within 36 hours.

In the near future, we will fold our existing product portfolio into an end-to-solution that will revolutionize the agriculture industry in Rwanda and pioneer Rwanda’s first active AgTech scale out into new regional markets.

As much as we have an obsessive focus on growing our market around the poor access to quality affordable farm inputs, we know that this end-to-end solution is the point on our growth trajectory that will exponentially increase our impact and is what keeps up our team at night.

It is that solution that will open the world in new and shocking ways to the noble farmer practicing his trade, full of determination and hope for a better life, in a remote corner of Nyamasheke district.

Today, from the deep and varied lessons we have learnt over the last few months, we are preparing to move to the next phase of our business which involves moving our online platform from shambapro.com to shambapro.rw to give a friendlier tool for both English and Kinyarwanda speakers. We will then retain the former site as our main business landing page.

We also intend to establish a customer care and fulfillment centre in Kigali to handle physical and online enquiries to help our clients struggling to move from the traditional over-the-counter transaction experience to a smoother, safer and more efficient online transaction process with overall better customer experience.

Funding Challenges

Our immediate challenge, however, is our ability to fund growing operations to sustain and increase our monthly revenue to attempt to satisfy existing and grow potential demand. Traditional funding from angel investors or venture capital is an attractive option for many start-ups across the world but unfortunately in Rwanda or Africa in general, it is still largely a hard nut to crack despite concerted efforts by government and other sector players to help local startups improve their access to this funding courses.

My own view (which may be rightly biased) is that a majority of funding opportunities targeting very early stage African startups through competitions, grants or accelerators are geared to look for ‘sexy’ and ‘cutting-edge’ tech innovations, yet the majority of start-ups trying to solve basic problems in Africa like access to farm inputs have large addressable markets but are appear plain and ‘boring.’

More often than not, such businesses do not look like viable and scalable models until they began to garner a huge unexpected traction. A case in point would such phenomenal success stories like Mpesa in the telecom industry or Agency banking model almost now widely accepted, adopted and replicated across and outside Africa.

I would wonder if Safaricom/Vodafone and Equity Bank in Kenya which pioneered these simple innovations would have attracted any interest from the current traditional seed or venture capital funding, if they were startups, before they began to get millions of customers like many startups in the west who get million dollar valuations purely on pre-revenue stage.

Therefore this challenging environment means that we have to think about self-funding and other alternatives in order to break the ice ceiling of traditional funding. This is not to say however that it’s not possible for the ‘boring’ ideas to get traditional funding.

Startups like SokoWatch, now operating in Rwanda, Tanzania, Kenya and Uganda in informal retail, SafeBoda which started in Uganda and scaled to Kenya and Nigeria or Twiga Foods, a food distribution company in Kenya that has raised over $67 Million buck the trend, just that even with exponential investment increases into the continent, it’s still much more difficult for majority of founders with good ideas in Africa.

The advent of Covid-19, as unfortunate as it has been, has on the other hand raised lots of awareness about the importance of digital platforms in the lives of people as well as the importance of food, both which have raised the huge positive role that agtech companies can play in improving livelihoods of farmers and food consumers in Africa.

So as we work to maintain long term strategies while trying to keeping the lights on in a young, bootstrapped business, it is imperative that at the point where we cannot raise access traditional funding options, we need to think away from the box.

So we are trying to create awareness among stakeholders as potential local funders through partnerships in Rwanda, most of who may not be aware that such opportunities exist, and to demonstrate the benefits that it will bring to them.

How partnerships can work

One option, we think, would be International Organizations or Non-Governmental Organizations (NGOs) based in Rwanda which have a key mandate in improving agriculture & agribusiness value chains to help achieve food security and improved livelihoods or otherwise – talk about how the DFID challenge fund helped birth M-Pesa.

We believe that since our mission is strongly aligned to these organizations they can support us in the following ways.

• Channeling their farm input support to beneficiary farmer groups, cooperatives or individuals through our platform. In this way, they do not actively fund our business but help us to show farmers the net benefits and savings of using our platforms to procure farm inputs while they save time and money that they would have otherwise invested in farm input procurement and distribution activities that is not the core activity in their organizations.
•  Last mile delivery and logistics of technical farmer support are a major challenge at the beginning because of the terrain but with time are solved through innovation and scaling. Instead of an organization funding our operations directly, it can share existing resources that may be underutilized like office space in upcountry locations, transport of inputs, delivery of commercial or promotional messages through existing field staff etc.
• Small grants support (US$ 10,000 – 50,000) can be channeled into specific components of our platform to help improve efficiency under a clear memorandum of understanding (MOU) to avoid misuse of funds.
• The organizations can create a rolling interest-free fully refundable fund to guarantee our suppliers who make farm inputs available to our Farmers Shops or Fulfilment centers close to farmers. This will also help us create bonds of trust with suppliers that will outlive the availability rolling funds which will be returned to the funder while at the end of the cycle.

Mutual benefits

Such partnerships with AgTech startups such as ours will increase farmers’ incomes by improving efficiency in the supply chain and passing savings down into cheaper farm input prices. It would also save the government from heavy investment in subsidies, create more jobs in the private sector for extensions workers, logistic players etc. and encourage more young people to engage in agribusiness because of more transparency in input and market pricing. In the medium future, it would help us increase traction and demonstrate to angel investors and venture capital that our solution is viable, sustainable, scalable and hence fundable.

This partnerships can provide an advisory board role to the partnering organization for a specific period which creates a crucial learning window for philanthropists of how the tech industry can play an enabling role in helping farmers succeed.

This window would provide important data and information and real world experience that will help the organizations to better structure value chain support interventions for farmers in the future especially in market or demand-driven initiatives.

Open door policy

At Shambapro, we are open in the short and medium term, to explore such innovative partnerships that lead to mutual benefits for ourselves and our partners and genuine long term sustainable impact on farmers in general. We are free to to start open-ended discussions and welcome any warm introductions to potential partners.

The writer is Kelvin Odoobo the CEO & Founder of Shambapro Limited