MYFUGO INNOVATIONS LIMITED

MyFugo is a record-keeping and value chain aggregator in the dairy industry that seeks to increase farmer productivity and profitability by addressing problems such as rampant disease outbreaks, lack of access to market, lack of access to finance & livestock insurance and inadequate skilled veterinary doctors.  Using smart cow collars (IoT sensors) integrated to a Web and USSD platform we provide data-driven record-keeping solution to farmers on a SaaS model. The data-driven record keepinghelps to deliver the insights and analytics needed to optimize the productivity of every cowenabling dairy farmers to improve yield and profitability. Farmers are able to increase milk productivity by reducing calving period by more than six months. Myfugo uses the data insights to provide micro loans for dairy inputs, cow financing to enable farmers acquire more cows, and insurance of livestock. The platform also provides farmers with access to qualified veterinary doctors, and quality dairy inputs. 

The average dairy cow in Africa produces 5-10 liters of milk per cow compared to 30-40 liters of milk per cow in developed countries. The low productivity is attributed to 

• Poor low yielding breeds of indigenous cattle,  
• Poor management including inadequate feeding,use of manual ways of estrus, leading to long calving intervals and high cost of feeding and treating the animals, and yet still miss the cow’s fertility dates.
• Poor health management ,missed vaccinations leading to rampant diseases, low productivity and eventual death

Farmers  result to keeping more cows to increase milk production. Given that a cow produces carbon dioxide and methane gas equivalent to burning 1000 liters of petrol yearly, low  productivity local breeds,  lead to high carbon foot. In addition farmers lack access to finance which affects  access of quality of dairy inputs, AI services and access to market information. The low spending on agriculture by most African governments makes extension services and veterinary doctors inaccessible. Land shortage and inefficiencies along the animal feeds production chain in preservation of fodder are also major challenges that increase cost of production. This is further compounded by supply of substandard animal feeds and supplements by unscrupulous traders affecting productivity of livestock.

Myfugo core solution is the smart cow collar with IoT sensor that is  integrated with a Web and USSD platform to provide dairy farmers with data-driven insights to improve yield and profitability. The platform has  the following features

Record-keeping solution to capture data with ease and keep online records ensuring optimum management by identifying diseases in time, or when the cow is on  heat and invoking appropriate intervention.

Early Disease Intervention : By sharing online health data with your veterinary doctor, early disease intervention is actualized without the need for physical presence

Finance: We provide access microloans for dairy inputs disbursed directly to their mobile money accounts. Farmers access cow financing to enable them to upgrade to superior exotic or crossbreed cows with high milk production.  

We link farmers to farm inputs and feed producers as well as vetted  veterinary doctors and extension officers 

Marketplace: Farmers and traders can advertise and sell livestock and farm related items online within MyFugo community.

Animal Traceability: MyFugo generates a unique lifetime identification number which allows animal movement traceability from one farmer to another. Disease traceability can be achieved by knowing the location of diseased and at-risk animals.

Smallholder Dairy farmers make up to 80% of total dairy producers  and produce 56% of total milk in Kenya.Dairy farming is a source of livelihood to approximately 1 million small scale farmers and 500,000 milk traders contributing 8% of Kenya's GDP. 85% of milk in Kenya is sold and consumed raw.Despite this farmers live in poverty in rural areas with poor access to nutritious foods, education, health and  dignified livelihoods.

To design think our solutions we are working with cooperatives and farmer associations, the government agency Kenya Dairy Board; research institutions and stakeholders KALRO, ILRI,University of Central Lancashire,Mt Kenya University;  finance partners RABO Bank, FSD; NGOS eg Welthungerlife, and VSF Germany.

Myfugo will increase milk productivity by 500% from average of previous output of 5 litres per cow to average of 30 litres per cow by financing  high yielding crossbreeds through our cow financing. Myfugo facilitates proper record keeping creating data insights that enable them to access finance, insurance, veterinary doctors, quality feeds, vaccinations, AI services,& market access at better prices through our partnerships with cooperatives for value addition and processing.

Myfugo alleviates farmer poverty by increasing incomes through higher productivity of cows, and prevents loss of cows to diseases

To increase milk yields and therefore income, farmers keep more low yielding cows leading to a high carbon foot print. Kenya produces 85% of milk in Subsahara Africa,indicating worse inefficiencies in other countries. Myfugo seeks to create sustainable and profitable dairy value chains in Sub Sahara Africa and reduce the carbon emissions in the industry by enabling farmers to produce more milk with fewer cows as well as have milk processed and consumed in close proximity to where its produced through cooperatives to reduce carbon foot print of transportation and distribution of milk. Myfugo alleviates poverty by facilitating resilient livelihoods

Myfugo has localized the proven smart cow collar technology for African farmers. Smart Cow Collar enables the farmer to know the exact time when the animal is on heat or is sick by detecting temperature and movement changes.The information is then sent to the farmer’s phone in real-time through the MyFugo app every 30 minutes alerting farmers on changes in animal health and heat patterns.Farmers using manual ways of estrus, miss this critical window leading to long calving intervals high cow maintaining costs the cow and low productivity.

On the Myfugo app Farmers can ask questions and get instant feedback, can access vetted veterinary doctor, AI service providers, feeds and dairy inputs as well as sell and buy livestock and farm inputs.   Farmers using USSD feature phones can still the App using the USSD code.

To localize the solution further Myfugo uses a PAYGO financing model for the cow collar ($150) and the crossbreed cows ($600-$1500) to make the solution affordable. The app also has micro-lending services where farmers can borrow $50-$100. 

Our partnerships with cooperatives enables us to offer cow financing to farmers in cooperatives or  group-lend to farmers associations with minimal default rates as the loan repayments are made from checkoff system from the income from milk.

Our competitors Digifarm and Smart Cow offer basic record keeping without leveraging the data insights to offer solutions across the value chains. While Microfinance and lending apps just offer finance while we create an value chain solutions ecosystem. 

Smart cow collars have been successfully used in developed countries like Netherlands and New Zealand and Myfugo is localizing the solution by integrating it to a web app and USSD code on a SaaS model. The smart cow collars have real time IoT sensors that collect data from cows and with the machine learning data analysis, and cloud-based data centers the data is managed and insights derived to support the farmer in order to manage quality of dairy production.

Myfugo enables Dairy farmers adopt digital management of their herds facilitating immediate access to real-time data enabling sustainable, efficient and optimum production without compromising on the health and well-being of their herds. Dairy farmers loses millions worth of production every year due to undetected udder infections, diseases, and missed estrous cycles. By understanding the immediate impact of essential factors like weather, climate, and feed, and having the ability to detect and monitor calving schedules can mean the difference between making or losing hundreds of thousands of dollars.

The data from the record keeping feature facilitates loan appraisals for the micro lending and loan limits auto- resets depending on the performance of the borrower. The data insights also enables determination of insurance premiums and enables insurers to determine cause of death or negligence by the farmer in case of death. Our cow financing product bundles the cow collar and insurance to give more value and safeguard against loss.

The geo-location feature enables matching of farmers to resource and services providers. 

Intelligence livestock monitoring solutions have been used worldwide to collect and analyze critical data points for every individual animal, delivering timely reproduction, health and nutrition insights. Smart cow collars enable dairy producers increase efficiency, improve livestock well-being, and drive prosperity for their farms.

Smart cow collars application and benefits include:

Improved reproduction rates

Smart cow collars enable accurate estrus detection. Farmers simply get notified on their phones. Reduced calving periods and increased lactation periods ensure higher profit generation from dairy farming

Higher Profit Margins

Farmers save significant amounts of money as a result of reduced treatment costs, reduced need of labour, feed optimization and relatively high milk yields.

Early disease detection

Rampant disease outbreaks in Africa leads to loss of herds leaving families destitute. Smart cow collars  detect early disease symptoms and notify farmers ahead of time to reduce treatment costs and keep cows healthy

Stress management

The cow collars through the web app send stress alerts based on cow vitals and actionable recommendations to save treatment costs & potential revenue loss due to falling milk yield. 

Operational efficiency

Cow Collars track of cows 24/7  including geo-location which reduces cow theft or stray cows. This enables farmers to reduce inefficient  monitoring labour, reduce operational costs & increase  profits.

Feed & minerals optimization

Cow collars  monitor the cow's rumination and compare it with the feed intake. This facilitates efficient feed management, keeps feed and supplements expenses low  and keep cows happy & healthy by optimizing feed. 

https://www.huawei.com/minisite/iot/en/connected-cows.html

https://www.hindawi.com/journals/jfq/2020/4242805/

https://www.labx7.com/cow-collar-smart-dairy-iot/

https://www.iot-now.com/2019/06/03/96370-digitising-dairy-connected-cows/

To increase milk yields at lower  impact on climate and land, farmers needs to upgrade to high yielding crossbreeds or exotic breeds and also need to adopt modern dairy farming techniques to increase efficiency, productivity and profitability.Without access to finance  farmers cannot afford the upfront cost of upgrading the breeds and dairy farming is capital intensive needing several inputs.

Myfugo theory of change is that if farmers can access cow financing of high yielding cows on a PAYGO model with repayments made from milk yields sold to cooperatives, they can increase productivity by 100%-500% and incomes by 100-150%. By bundling the cow finance with the smart cow collars and Myfugo SaaS web app, farmers can increase productivity, efficiency and reduce looses by accessing veterinary and farm inputs. 

Microloans to finance inputs such as feeds, vaccines, vet fees, and supplements sustain the farmers without dropping the ball on them. Farmers live in remote rural areas and need to travel to the nearest town to get a vet or agrovet shops to purchase inputs. Myfugo links service providers and input distributors who deliver closer to the farmer.

Myfugo links farmers to cooperatives farmers get better prices for their milk. Cooperatives owned by farmers is our core partnership strategy as it increases incomes to farmers after value addition of the milk. The milk is also processed and consumed close to where its produced reducing carbon foot print from transportation or loss of produce by selling raw milk. 

With better management practices, farmers increase their productivity, efficiency and profitability as well as reduction diseases and calving cycles.Increased productivity means increased incomes and translates to better livelihoods. With Myfugo farmers now have access to livestock insurance and this creates resilience since loss of cows without any form of compensation would send farmer back to the abyss of poverty. Myfugo creates resilient livelihoods, increases milk production, creates sustainable and integrated  value chains  and transforms dairy farmers form poverty to dignified lifestyles.  Myfugo improves improve nutrition in rural communities and with increased incomes the rural communities can afford more nutritious foods and better lifestyles.

Myfugo Saas app has 8000 subscribers with 3000 being active daily users and another being intermittent users.Since October 2019  we have loaned over $50000 in micro loans and $30000 in cow financing . Our current demand is 100 cows financing orders per month  but we have no capacity to meet that and we are doing intend to do 20 orders per month on raising funds and 100 orders of cow collars per month. 

As at May 2020 we had 1,000 unfulfilled cow financing orders and 3,500 pending orders for the smart cow collars. We are currently looking to raise $600,000 to meet the current short term demand.

From 2021 we target to be serving 10,000 farmers per month with the microloans and smart cow collars. We hope to have increased our capacity to meet the demand of 100 cows per month and plan to do 1000 cows per month in 5 years.  

In one year we will have completed calibration of the smart cow collars to suit the different regions humidity, altitude and climates.We are working with University of Lancashire on this timeline. This will enable us to meet increase marketing to the 45 counties in Kenya.  Our smart cow collars are currently calibrated to suit 5 counties in Kenya regions and we are working to cover 40% of Kenya in 6 months times.

We currently have 100 vets and extension officers and hope to increase this to 500 in the next one year.

There are  currently 4.3 million dairy cows in Kenya alone producing 4.4 million litres of milk. Myfugo long term goal is to halve the population of the low yielding dairy breeds in 10 years by substituting them with high yielding breeds and increase milk production by 500%. 

In the next 1 year we seek to finance 1500 high yielding cows and finance micro loans for dairy inputs at $20,000 per month. We also hope to have calibrated the cow collars to cover 45 counties in Kenya . We are working on on-boarding 200 cooperatives (average of 3 per county)  in the next one year to increase our reach across Kenya. 

In five years we hope to have finance 10000 cows and disburse microloans to 50,000 farmers at an average of $1,000,000 per month. We project to increase milk productivity by average of 200% -500% per farmer.

We want to grow our vet network to 500 vets and 1000 extension officers as well as partner with 10 dairy feeds and input providers in the next two years. 

Myfugo launched in Western Kenya where the conditions are conducive for dairy farming but it is a less mature dairy farming region compared to more mature central Kenya ecosystem. We hope to directly impact 5000 farmers in the region in 18 months though partnerships with NGOs VSF Germany, FSD, and Welthungerhilfe.

The major barrier is lack of finance to support our loan books, and purchase the smart cow collars. Since February 2020 we paused our cow financing marketing as we couldn't match the demand we were generating. We currently have 1000 unfulfilled orders.

Our model of cow financing is dependent on partnerships with cooperatives or processors who we need to checkoff the loan repayments form the milk payments. The B2B client acquisition necessary  to develop these partnerships and onboard them is quite lengthy and with some resistance since many view us as competition on the financing aspect.

We also face the challenge of lack of finance to hire machine learning professionals to facilitate the calibration and optimizing the cow collars to various regions. 

We also foresee a challenge in the sourcing of the crossbreeds as we hit critical mass since there are few commercial breeders in the regions with breeds optimized for different climatic conditions in Kenya as well as other African climates. The tropical African climate has high differentials with breeds being suited for specific regions having been breed to resit different diseases  prone to specific regions. 

Finally we have a challenge in developing the hardware for the smart collar. In December we sourced from a manufacture in China changing from Europe with the hope of lowering the prices to retail at $80 from the current $150. Owing to the Covid pandemic we are yet to receive the batch causing supply chain strains and leading to unfulfilled orders. 

To address the finance and loan capital, we are currently fundraising for $600,000 to meet this years demand. 

We are actively pursing partnerships with cooperatives and also testing the group lending model that microfinance uses targeting farmer associations. To reduce the resistance we are currently testing with Vihiga Cooperative a model that seeks to have the cooperatives lend directly to their farmers and we source the cows . The cooperatives guarantee the loans and remit the loan repayments  directly and they has the responsibility of following up with individual loanees. This strategy will increase our reach and reduce non performing loans as well are reduce the perception of competition. 

We are currently partnering with Kenya Agriculture and Livestock Research Organization (KALRO) to increase availability of crossbreeds semen and  increase uptake of selective breeding techniques. We are also working with model farms who we are pursing contract breeding with so as to build capacity for the cow sourcing. 

In time we hope to develop human capital for machine learning skills as well as local manufacturing capacity to create supply chain resilience. 

Full time Employees : 10

Part time employees: 15

Contractors: 57

Allan Tollo_ Founder/CEO has 20 years experience holding CXO positions ERP implementations in Healthcare, Insuretech, and Fintech. He holds a Msc. in Management Information Systems from University of Nairobi and Msc. in Project Management from University of Northurmbria.

Jackson Mwaniki - Co-founder/CTO has six years experience as a developer and has successfully completed development of car tracking software, hospital management and fintech software. He has worked as a backed developer for various companies including Andela.

Jason Ngatia is the senior Developer with 8 years experience in insure-tech and fin-tech systems as a front end developer.

Grace Njoroge- Corporate counsel and Commercial officer with 6 years working in legal and finance in East Africa. She has worked with several startups in the  East Africa market. 

Bill Misenda- Financial Consultant has twenty five years in microfinance and financial institutions. 

Tor Hjorth-Falsted- Board Advisor: Is a seasoned founder and finance professional extensive experience in the continent.With a finance  background he has a proven track record of developing new investment opportunities in the continent  as well as actively adding value to investments across the Southeastern African region.

Andrew Ford - Board Advisor: Andrew is a c-level global board business leader, with more than 25 years of experience growing revenue and EBITDA across corporate, private-equity and start-up SaaS and tech businesses, across Europe, USA, Americas, Asia & Africa

Current Partnerships

Financial Sector Deepening (FSD-Kenya):Underwriting -Alternative credit scoring for the  microloans.

RTI International- Climate Smart agriculture innovation and livestock insurance Piloting the cow collars and ear tags in Ethiopia -$250,000 grant

Rabobank-Debt investment of up-to $200,000 draw-down starting from July 2020

DFID-$175,000 grant for cow collar financing -March 2020

Mt Kenya University, & and  University of Central Lancashire Collaborated on feasibility study of the smart cow collar 2018-2019 . Currently optimizing calibration to suit zero grazing and various Kenyan climatic conditions 

VSF - Germany and Welthungerlife- NGOs working in western Kenya regions . We are partnering to offer cow financing to 5000 thousands farmers delivering 10,000 cows in the next three years and microloans averaging 30,000 per month

Vihiga County Cooperative - We are piloting B2B cow financing model where Myfugo will lend to the cooperative who manages repayments and enforcement with their members. The cooperative pays the cumulative monthly repayments due from all member loanees whether or not they have repaid and its their sole responsibility to follow up with individual loanees. This model is different from the current checkoff system we use on our B2C model. 

Liquid Telcom to support IoT internet connectivity

Ecosystem partnerships/ Accelerators and incubator Highlights

Tony Elumelu Foundation

Kenya Climate Innovation Accelerator

Holt Accelerator-

Partnership Goals

Myfugo is seeking to build investor and grant makers connections to facilitate their fundraising strategy

Myfugo seeks machine learning  expertise to localize the smart cow collars.

Myfugo is looking for strategic partnerships to accelerate the B2B model

Myfugo Business Model:

B2B Business Models: 

Targeting cooperatives and NGOs working with Farmers. 2% monthly interest on cow financing, Cow collars at $100 and 5% monthly interest on dairy inputs loans

B2C Business Models

Targeting Dairy Farmers or farmer associations 

Free Myfugo record keeping and marketplace app

5%  monthly interest on micro loans and $150 for cow collars

Other sources of revenue

10% Commission from Vets, insurance and input or livestock  sales that take place on the Myfugo app.

Value Proposition 

Access to Input loans

Financing superior high yielding breeds

Smart cow collar for heat detection and data insights

Myfugo social impact is  embedded in the  value proposition. 

Cost Structure

Our biggest expense is the loan capital since we buy the cows and pay upfront but the farmers pay in 12-18 months installments. we bundle the cow Cow financing with the web app and cow collar to increase penetration in the market.Cow financing is the product that has the highest demand and potential and has put a lot of pressure and financial constraint The Microloan loan capital is a revolving capital as farmers bay in 4-6 weeks. 

Key Resources

Developers, Artificial intelligence and Machine learning

Cow Collars

Funding

Breeders

Credit and marketing professionals

Partners and Key stakeholders

Research Institutions

Cooperatives and milk processors

Manufacturers

Type of intervention

Service

Financing

SaaS

Myfugo is applying to solve to access funding and partnership  networks as well as technical assistance in AI & Machine learning technology. Myfugo Cow financing product Leta Ngombe is very capital intensive and we urgently need funding to scale our operations and create more impact. We need funding to reach 1.8 million farmers and finance 2.5 million cows in the next 5-10 years.

IoT sensors that leverage machine learning, artificial intelligence and cloud computing require talent with skills to localize the solution. We need talent development for local developers as well as research partners to partner is piloting the solution in other African Countries. 

We need partnerships to develop more affordable cow collars to reduce the retail price to the ideal $50. We are seeking research and development as well as manufacturing partnerships to achieve this.

We need marketing and partnership development support to scale our services to the 45 target counties in Kenya. WE are looking for NGO or cooperative partnerships to scale our solution

We also want to benefit from the MIT and Solve community and look forward to knowledge sharing and network building.

Solution technology: we need technical assistance in localizing the smart cow collars to African climates and grazing methods since farmers are zero grazing yet the collars are calibrated for open field grazing. 

We need assistance in scale service and product distribution through cooperatives and NGOs

We need funding to support our activities especially the loan capital

We need monitoring and evaluation expertise to manage our reporting obligations to grant makers who have financed our solution as well as monitor impact.

We need in kind support such as underwriting the loans, financing and microfinance tools and skills. 

We would appreciate research and testing partnerships to facilitate piloting of the solution in different regions

MIT- Technical and professional assistance in Machine Learning

The Bill & Melinda Gates Foundation : Grants and funding for the microfinance and dairy value chain sustainability

Foundation for Food and Agricultural Research: Grants and Funding for the smart cow collar  research with University of Central Lancashire and Mt Kenya University.

Global Compact: assistance in aligning Myfugo strategies and operations with sustainability principles

Atlassian Foundation International: Accounting and workflow assistance

The BHP Foundation: Natural resources equity, land use efficiency and environmental resilience  assistance and granting funds to fiance these activities.

Elevate Prize Foundation: Prize funding

Lex Mundi Pro Bono Foundation:- Legal Services

World Bank Group: Partnership to end extreme poverty  and promote shared prosperity by fostering the income growth of farmers

In Africa though livestock are culturally deemed to be owned by men, it is women who contribute to 85% of the value chain activities. Women farm and gather and prepare the fodder crops, they milk and deliver the milk to traders or cooperatives and they are the primary care givers of the livestock in dairy farming. Myfugo solution increases productivity of cows and reduces the labour needed to cater to the cows. By keeping fewer animals, women are freed to focus their time and labor on other activities economic activities. 

 Despite women being the key resource persons in dairy farming, women currently comprise of only 12% of dairy farmers in Kenya. Myfugo recognizes that though 65% of our cow financing clients are men, 88 % of Myfugo users are female as their husbands purchase the cows and leave the wife to care and nature them.

Women often lack finance to purchase cows. With our cow financing facility 35% of our customers are female and 75% of the micro-lending goes to women. With the prize we will increase cow financing targeting rural women groups and young unemployed women  to improve their livelihoods. If we win we will dedicate the prize money to finance female dairy farmers.This will leapfrog women to become dairy farmers and earn income separate from their husbands. Women will have alternative sources of income are reduce dependency . We know that if you empower women you empower the village and Myfugo is doing so sustainably. 

The smart cow collar is an Internet of things (IoT) sensor that enables  data-driven insights in dairy cows creating greater opportunities for smart dairy farming.The demand for milk is continuously increasing due to increasing population in Africa.To meet this increased demand for milk products, better technological techniques for improving milk yield are required. With the smart cow collars , farmers increase their productivity and profitability. Myfugo uses IoT , AI techniques and machine learning connected to cloud computing   assists dairy farmers to overcome different traditional farming challenges and increase the milk production. 

The smart cow collar detects heart and movement changes in the cow and data is analyzed to gain insights as to the estrous cycle or disease infection. The smart cow collar is able to detect when cows are on heat and prompt farmers too administer the Artificial insemination. Missed estrous cycles leads to long calving cycles which contribute to 75% of the dairy productivity losses. 

In tropical African climate diseases are rampant and the smart cow collar is able to detect changes in movement and heat that indicate an infection. The smart cow collar sends real time prompts that enable farmers to seek veterinary services in good time. This prevents loss of animals to avoidable diseases

Livestock insurance in African is a mere 0.2 % of all insurance  yet the total insurance covers only 2% of the market. The low insurance penetration is attributed to lack of data and insights. With tech smart cow collar , the insurance provider now can obtain data to enable in premium determination and also the records will assist in the time of compensation to determine cause of death and negligence by farmer.  

Myfugo is using AI to improve livelihood of rural dairy farmers and increase productivity of milk yields in Africa.

On average a cow produces green house gasses equivalent to burning 1000 litres of petrol in an year. Rural dairy farmers in Africa keep low yielding breeds that produce 5-10 litres of milk per day compared to 30-40 litres a day in developed world. To increase productivity and therefore income,farmers result to keeping more of these low productivity cows. This results to high carbon emissions without any corresponding benefit in productivity. In Kenya there are 4,5 million dairy cows owned by 1.8 dairy farmers that produce 4.4 million litres of milk. The figures clearly shows that diary sector is very unproductive but has high carbon emissions. 

Further, dairy farmers live in rural areas and are scattered across the country. However the demand for milk is mainly in urban areas where it is sold raw. Farmers rarely consume the milk they produce as they forego consumption to sell to generate income. The poverty levels do not allow rural farmers to consume their own produce and the poor community around them can also not afford to consume diary products. 

Given that dairy farmers are fragmented, the value chain generates high carbon emissions in collection and delivery of milk to the few processors located near urban areas. 

Myfugo solution enables farmers to keep half the cow by increase productivity by 500%. In addition we partner with cooperatives who commit to process the milk locally creating jobs and reducing transport emissions. With improved sustainability and profitability, the rural communities are able to produce enough milk for household consumption and sale. This improves nutrition in rural communities as well as livelihoods

Myfugo's goals is to reduce the population of dairy cows by 50% in 10 years by substituting them with high yielding cows that produce more milk  at half the impact on climate and land.