AgUnity: Connecting the last mile

Our Founding CEO David Davies has been the Founder and CEO of several successful FinTech, SaaS, and mobile startups. He previously spent over a decade in senior roles at global investment banks (Goldman Sachs, Lehman, Nomura & SCB). David’s presented keynote speeches at Global Forum on Innovations in Agriculture 2018 (where AgUnity was also awarded ‘Best Innovation by a Startup’), Asian Development Bank FinTech Conference Manila, and Said Business School (Oxford University), as well as being named ‘Agriprineneur of the Year 2018’ by Future Agro Challenge in Turkey. David has a deep understanding of cryptography and distributed crypto-ledger (DLT) technology along with the impact of trust, digital identity and financial inclusion in changing the lives of developing world communities. David grew up on a wheat and sheep farm in South Australia and has seen first-hand the profound challenges faced by farmers in emerging markets.

Forty per cent of the world’s population earn their income from agriculture, however up to 50% of their crop value is lost between harvest and sale. Simple things solved decades ago are often insurmountable challenges for farmers in emerging markets. This includes crop spoilage, corruption, unreliable record-keeping, and limited access to product and service providers.Two-billion of the world’s unbanked are small family farmers and their families, typically earning $2-3 dollars a day.

Within this context AgUnity has created a project that is providing a pathway to financial inclusion for the world’s poorest farmers. The AgUnity App is a simple mobile service that helps small farmers plan, trade and track everyday transactions, and becomes a way to improve productivity, save money and easily access inputs, capital and knowledge.

If scaled globally to the bottom two-billion, it can add $1.1 trillion to the global economy each year through increased farmer incomes.

To explain in further detail, 80% of the world’s food is currently produced by smallholder farmers. These farmers rarely have access to equipment to assist in the planting, growing and harvesting of their crops, and face significantly restricted market access. Farmers frequently lack access to financing that would allow them to purchase better quality seeds, inputs or rent farming machinery, and also rarely have access to information on best practices on how to get the most out of their land.

One solution to the above problems that is promoted widely by most NGOs such as FAO, Gates Foundation and IFC is the creation of farming cooperatives. Co-operatives harness the power of collective bargaining (better prices at market, cheaper farming input costs), create a structure within which they can agree to share equipment and resources, and provide access to market information that can help farmers decide more profitable crops to plant.

However, farming cooperatives face significant challenges, including: poor record-keeping, a lack of documentation, inefficiency, corruption and graft. With smallholder farmers to contribute the majority of the extra 60% of food required to feed a nine-billion-plus population by 2050, co-operatives are critical to helping farmers increase productivity and meet global demands.

AgUnity provides farmers in Africa, SE Asia, South America and the Pacific (and other agricultural value chain stakeholders) with a low-cost Android smartphone (~$54 USD) that come preinstalled with a proprietary Android OS platform, Axsari OS, and the AgUnity App, which is permanently locked to their identity. In the AgUnity system every person has their own phone which provides their identity, wallet and record of all their transactions.

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 App allows for the deployment of hundreds of other applets for a variety of purposes (including Microfinance, Crop Insurance, Banking etc.). 

Critically the application solves the problem that when smallholder farmers hand over their crops to a co-operative, or hire another farmer’s equipment, that there is a secure record to ensure everyone gets paid. Issues and disputes currently arise when a farming cooperative and a farmer disagree over a previously agreed price, yield or the weight of the crop provided, either due to graft or simply a lack of proper documentation.

Our target population is the 2-billion unbanked low-income smallholder farmers and their families 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 deployments. This market is characterised by very low-levels of literacy, and limited access to technology or educational services.

We have spent the last four years developing a platform designed to help assist these farmers. The platform has been developed using the principles of Human Centred Design, and our team has spent countless hours living and working side-by-side farmers, understanding their challenges learning to create useful technology.

The User Experience (UX) developed specifically for first-time, low-literacy users. At its core the platform is based around the use of simple geometric shapes and primary colours. This means our solution can be used by any farmer, anywhere, regardless of literacy or prior technology experience. 

We also conduct both qualitative and quantitative monitoring and evaluation (M&E) surveys for each deployment, to measure the impact of our project on the lives of low-income farmers. This M&E is aligned with best-practice standards and against the UN SDGs.

A bit over a decade ago, the iPhone and other smartphones transformed life for most of the developed world. They delivered instant convenience in ways that were previously unimaginable. They didn't, however, help those in poverty. Smartphones can cost more than a year's income for many farmers, and as much they might enjoy Facebook and YouTube as much as we do, they don't help them earn more and feed their children

AgUnity is transforming all of this. 

As AgUnity reaches scale, we will see the transformation of the earning capacity of the world's most vulnerable, low-income, and marginalised communities.

In early 2016 my co-founder John and I had just exited one company and we were busy developing a truly advanced cryptoledger technology for data transmission. "Xenect" is specifically for disrupting the Bloomberg/Reuters market and is something like a hybrid of blockchain and BitTorrent. It is far more sophisticated even than Ethereum or anything in the blockchain space so we had a very strong understanding of the technology.  

We happened to attend a FinTech event in London and John entered into a hackathon for which the theme was ‘FinTech for Good’.

In all honestly, we wanted to win a prize from Singularly University, and so challenged ourselves to come up with the most ambitious, world changing idea we could. Our idea was a way to meaningfully help the 1-billion poorest farmers in the world. 

Over the weekend of the hackathon we started to realize that we'd inadvertently stumbled onto an idea that could be world changing. After we won, both Gates foundation and UNICEF confirmed that it was unique and potentially huge. Since then, we have received huge support and encouragement from major NGOS, as well as being published by UN FAO (FA) and IFC World Bank (IFC).

In many ways my whole life has been culminating towards the creation of AgUnity.

I grew up on a 15,000-acre wheat and sheep farm in rural South Australia. Growing up, our local wheat cooperative would manage everything from negotiating prices for sale, organisations agricultural inputs, and facilitating loans and insurance.

In the mid-90s, I was lucky enough to travel through West Africa working with UNESCO. During this trip, I was awe-struck and crushed at how the challenges being faced by the local farmers were ones that we took for granted back home. Cooperatives were not functioning as I knew they could. I hoped someday I could change this.

I happened to also be interested in technology from a very early age. I built my first computer when I was 15, and then went on to spend 20+ years in senior roles working in technology at global investment banks (Goldman Sachs, Lehman Bros, Standard Chartered). I founded and exited two tech startups, before stumbling onto the massive opportunity that is AgUnity. 

With all my life experiences, I feel compelled to see our vision become a success, as it the potential to transform rural communities in emerging markets worldwide.

We have brought together a world-class team.

Founding CEO David Davies: 30-years in technology inc. senior management at international banks (Goldman, Lehman, SCB, Nomura). Successful founder multiple Mobile, SaaS, FinTech startups; Global 'Agripreneur of the Year' winner 2018.

CCO Petra Schneider: Founder IDEP Foundation, largest NGO in Indonesia, specializing in sustainable community development. Three decades producing education, communication, and high-impact public educational tools.

CPO Keith Nielsen: 21-years experience in Finance & Banking, Saas and Digital Transactions, as well as Cryptography & Distributed-Ledger Tech. Has led multiple ground-breaking technology prototyping, data engineering, ICT-based projects worldwide.

Program Director Nurvit Kristofikova: M.A. in Development Studies (IHEID, Switzerland), 15+ years as Program Director, Knowledge Products Developer, MSME & Social Financial Expert.

CTO Stefan Barrett: 20+ years in programming and application design, working on trading applications for major banks and other financial institutions. Expertise includes transactional functionality and security, and applying innovative approaches to design applications in uniquely efficient or functional ways.

CSO Neville Wood: 25 years of experience in IT Business Analyst, Fin-Tech and Agri-Tech sector. He is expert in Agricultural Business Transformation Projects, including Business Change and IT Systems, experienced in Insurance and Asset Management as well as Business Modelling & Strategy.  

We have an additional 20+ people supporting this project, dispersed between East Africa, Oceania, SE-Asia, Europe and the Americas. Decades of experience in Technology, Finance, Agriculture, Business, Marketing, and Sustainable Development.

In early 2020 we were anticipating business as usual for our company. New projects, new users, and expanding our team.

Then COVID-19 happened.

After undertaking a business risk assessment and identifying three critical risks (slowdown in business development, a downturn in investment, and hardware procurement challenges from China), we realised that while we would undoubtedly be impacted, we could also play a role in helping offset these impacts for other businesses.

Specifically, we identified that global supply chains were (and continue to be) being heavily impacted by regional lockdowns, and that this was devastating producers and their communities in both developed and emerging markets. 

And so, we decided to launch 'AgUnity Response', an initiative that focused on adapting our existing technology to mitigate these impacts. We rapidly developed a concept idea, launched a new subsidiary, and sought new team members on 'work-for-equity' arrangements.

Our innovation turned out to devastatingly on-point. We were selected out of 700+ other submissions as a winner of the OpenIDEO Business Pivot Challenge, and then approached by governments and NGOs to rapidly deploy our new solution. AgUnity Response now has a full pipeline of projects and 16 new team members.

In late 2017, we entered a competition hosted by Future Agro Challenge to pitch against the 5 best Australian AgTech startups in far-north Queensland. Going up internationally renowned competition including FluroSat, our CEO David took home the first prize as the national winner, and representative to the Global Agripreneur of the Year competition.

In March the following year, David went up to share our story against the national winners from 62 other countries, for a grand prize worth over 80,000 euro in marketing and research support. Over several days, the competition was whittled down and AgUnity made it through to the final two startups. After much discussion and a heartfelt explanation from David on his journey and why the AgUnity story is so important, David and AgUnity were crowned global winners and 'Agripreneur of the Year'.

David has since (and prior to) travelled all over the world giving keynote speeches and hosting seminars with the likes of Oxford University to share our story, and to gain support for the work AgUnity is doing. AgUnity has won over 10 competitions, been published by internationally renowned organisations, and is cited as 'the' model for developing technology for first-time digital users.

Blockchain Ledger: To our knowledge no ‘competing’ solution uses a blockchain backend to capture transaction, ID, IoT, and provenance data. Many solutions are focused on pure ‘farm management’, or their application of blockchain is limited (i.e. focusing only on ID or traceability, but not on transactions). 

Offline performance: Our platform is designed to work in completely offline and low-bandwidth environments in remote and rural areas. This means in addition to offline transactions, when a farmer reconnects to network coverage, the transaction synchronisation protocol prioritises AgUnity transactions, and these are coded for minimal data/bandwidth usage. This minimises the requirement for farmers to have connectivity and data allowances. 

User Experience (UX): is developed specifically for first-time, low-literacy users. Following the principles of Human-Centered Design (HCD), the platform is based around the use of simple geometric shapes, primary colours and few words. This means our solution can be used by any farmer, anywhere, regardless of literacy or prior technology experience. 

Operating System: The development of a proprietary mobile operating system (known as ‘Axsari’), a customised Android-based OS, enables us to tackle unique technical and social challenges faced in remote and rural areas. These include: a lack of continuous network connection; high cost of mobile data; a remotely-accessible and highly secure mobile device; the ability to deploy custom applications that cannot be removed by the user (e.g. mobile banking).

More resilient supply chain that is indicated by better governance, transparency and trust between supply chain actors, and level playing fields between producers and buyers. This outcome is realised by medium-term outputs such as more reliable and dependable supply planning; improved quality control and warehouse management, more frequent sales/customers loyalty, reduce spoilage and wastage, reduced transaction cost/more efficient operational and reliable payment in fair price. These medium-term outputs are viable through data traceability and consensual transparency afforded by the platform. Immediate output of this outcome is the new quality target achievable by the traceability function of the platform.

Broadened access to services such as financial, insurance or other technological services. This outcome is attained through accumulated transaction history and KYC-enabling platform whereas blockchain-backed trust can be built for third party verifiers. This outcome’s immediate output is the established link and integration of services into AgUnity marketplace / learning centre function or integration as other applets running in AgUnity platform. 

Improved access to market that is accomplished by easier ways for producers to promote and reach out to their potential buyers and vice versa, for buyers having easier ways to validate potential suppliers track records and to establish and manage transactions. Immediate output of this outcome is the set-up of AgUnity marketplace and ability for producers and buyers to list their produces and demand on the platform.

Increased rural connectivity with the increasing usage of smartphones in rural areas and with the increased digital literacy of farmers, we expect to garner linkage with telecommunication network and mobile providers to even improve connectivity. Immediate output of this outcome is the use of smartphones usage in rural areas, especially for farmers, with the offline-connectivity AgUnity platform enables.

AgUnity is currently contracted to support 1,500 farmers and co-operatives, and is new looking at a new COVID-19 related project to support an additional 800 small-scale farmers in Papua New Guinea.

In one year, we aim to reach 15,000 new farmers, this will be primarily achieved through existing partnerships and co-operatives, for example building on the work with Tsehay Union in northern Ethiopia, that has an estimated member base of 170,000 farmers.

AgUnity is targeting 10 million small-scale farmers and co-operatives within the next five years. 

We have already laid the foundations to achieve this. AgUnity is working with UN WFP, who currently serve ~92 million beneficiaries each year. We are also working with GIZ and multiple coffee value chain stakeholders in Ethiopia, where an estimated 15 million work in coffee production and supply. AgUnity also has contracts with Fairtrade International and Agriterra, working with and targeting ~1.7M and ~1M small-scale farmers and co-operatives respectively. 

Ultimately our vision is to become the technology of trust that is used by all small-scale farmers and their families, co-operatives and agri-food value chain stakeholders (over 2 billion people) in developing and emerging markets.

Through connecting farmers on our platform, we are aiming to see an average farmer income increase between 30% - 70% every 24 months, primarily achieved through better farming practices, connection to more buyers, and access to financial services. This is how adding an extra $1.1 trillion per annum to the global economy can be achieved within 5 years.

Our approach to scale is to partner with organisations who are already working with farmers in remote and rural areas, but who lack a technology platform that can be readily deployed. We plan to use both a white label and franchise model of our platform, where a single in-country partner can own the right to promote and deploy our platform in a designated country to enable the rapid global scaling of our services and to reduce the ongoing operational burden on us to manage dispersed geographies, cultures and socio-political environments.

We are also looking to significant leverage existing partnerships (UN WFP, USAID etc) to become the default technology provider for organisations working with Last Mile farmers and their communities.

The primary barrier for us to achieve our goals in the next year and five years having the appropriate partnerships and local staff to support the deployment of smartphones and training of farmers on using the AgUnity platform. For AgUnity to have a successful and timely pilot, and for the ability to scale quickly, we require on-the-ground partners who have the existing connections with local farmers and co-ops, and potentially local government and other stakeholders (e.g. milling, transport, storage companies). Without these partnerships in place, the resource and time cost to AgUnity is significant, as we have to establish trust in each of the required relationships which can take a significant amount of time. 

AgUnity is pursuing a partnership model that focuses on both partnerships with service and product providers who already have established business models and services but who are looking for a better way to connect with Last Mile users and grow their existing impact, as well as in-country representatives and like-minded organisations who are keen to promote and deploy AgUnity’s technology and manage the stakeholder engagement and field operations in new locations

Ultimately AgUnity can address the above challenges most effectively through leveraging the extensive networks of impact-focused organisations to enable them to better deliver their services, and who have the local cultural and industry knowledge to ensure each new deployment has a greater chance of success. Combined with new partnerships and ‘franchise’ or white-label models, AgUnity can reduce the need for complete ownership of the deployment of services to each country and also create new jobs for local businesses looking to support farmers but who are lacking a technology platform to do so.

AgUnity is currently working with USAID, UN WFP, GIZ, UN CDF, Fairtrade International, Technical Centre for Rural Cooperation ACP-EU (CTA), Bioversity International, Dubai Expo Live 2020, PNG National Government and many more.

In most of these partnerships, AgUnity plays the technology partner with expertise in developing and deploying technology that works in rural areas and for first-time digital users. There are tens of thousands of similar organisations who have decades of experience in capacity building and sustainable development in emerging markets, but who do not currently in-house technology resources to enable to improve the efficiency with which they can reach new beneficiaries as well as track the outcomes of their programs and interactions.

One example of how we are working with our partners is our work with Agriterra https://agriterra.org/) in Ethiopia, where we have shown how technology can improve cooperative management practices and communications between farmers and co-operatives. Since our work together in Gondar, Ethiopia, working with a cooperative union with 170,000 members, Agriterra has asked us to partner on additional projects to build upon the work completed to date and are currently including technology in their 5-year strategy plan for helping empower co-operatives and farming in emerging markets.

AgUnity's business strategy moves through a phased approach to reaching scale among low-income, small-scale 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 1.7M farmers worldwide. 

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.

To expand further for example, NGOs and organisations pursuing SDG programs often experience challenges assessing the impact of their programs in rural areas, let alone providing high fidelity, broad- spectrum data. Communication between program leaders and farmers can also be very challenging. These programs are also vulnerable to systemic corruption and money leakage by bad actors.

By equipping Last Mile communities with the AgUnity smartphones and ecosystem, NGOs can benefit from a new cost-effective communication channel. Subsequently the NGO can gain insightful data metrics about the impact of their initiatives, enabling them to conclusively and transparently validate their impact efficacy while empowering better, in-field, timely decision making.

AgUnity has a phased business model approach so that as more users are added to the network, the company will transition towards a pure Product company (scales well) and away from a Services company (does not scale well).  In the early stages of company growth, it is anticipated the majority of revenue will come from consulting and licensing fees before moving further towards the subscription and transaction fee model.

Service Providers pay between $50k-$200k AUD per contract. These fees consist of software development for custom versions of the AgUnity App or discrete mobile/web- apps addressing agricultural, rural banking and insurance needs of the Last Mile users.

We anticipate the white-labelling and licensing of the AgUnity App in new regions. Licensing fees will vary depending on the number of users and anticipated use case. White-labelling scenarios include commodity buyers (e.g. MARS, LUSH etc.) working directly with Last Mile users who wish to adapt and brand for their own use cases.

Service Providers using the AgUnity platform for their clients are charged $2 AUD 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. In addition to Subscription Fees, Services Providers are charged an average fee of $0.10 AUD per transaction.

AgUnity generated over 700,000 in revenue in financial year 2019 and is on-track to again generate over 700,000 in revenue in financial year 2020. The majority of this revenue has come from contracts with aforementioned partners, for both consulting and licensing fees.

AgUnity is currently raising $3M as part of its total Series A equity rise.

Tranche 1 – $300k will be made available to Wholesale & Sophisticated investors via a SAFE Note.

Tranche 2 – $1.5M will be available to Wholesale & Sophisticated investors via a direct equity investment.

Tranche 3 – $3M will be available to Wholesale & Sophisticated investors. Note: Should AgUnity’s Tranche 1 & 2 raises become fully subscribed, we anticipate raising the Valuation for Tranche 3 by 20%. 

AgUnity is targeting impact investors, family offices and VCs who have visions to help scale technologies that can deliver real and lasting impact to vulnerable communities worldwide.

Due to COVID-19, we are constantly revising our expenses for 2020, but we expect total expenses to be slightly in excess of revenue for the remainder of the year.

A bit over a decade ago, the iPhone and other smartphones transformed life for most of the developed world. They delivered instant convenience and entertainment in our hand in a way that was previously unimaginable. They didn't however, help those in poverty. Smartphones can more than a year's income for many farmers, and as much they might enjoy Facebook and YouTube as much as we do, they don't help them work, earn more, and feed their children. 

AgUnity is transforming all of this. 

As AgUnity reaches scale, we will see the transformation of rural communities and the earning capacity of the world's most vulnerable, low-income, and marginalised individuals. We have already witnessed immense potential for farmers to lift themselves out of poverty in our projects, with even further increases possible as they access micro-finance, insurance, a marketplace, and a learning centre via our platform. 

By leveraging one of the most successful technologies ever (the smartphone), and developing this to be accessible and useable by low-income, low-literacy users, AgUnity has the unique potential to help improve the lives for over 2-billion small-scale farmers and their families, eliminating the majority of the world's poverty, and achieving UN SDG #1 by 2030. 

But we will not get there alone. By participating in the Elevate Prize, we have a ready-to-go plan to utilise prize winnings to complete our product development to enable us to rapidly scale our services in each active countries, reach new markets, and create new partnerships for enabling financial inclusion.

While we have achieved an enormous amount of the last 4 years, we remain an early-stage company with immense potential for growth and improvement. The ability to identify the exact revenue model(s) that can enable the fastest scaling of our solution, as well as the talented professionals we know we will need to become an effective global enterprise, along with experienced board members and advisors to help us navigate what is a very high risk endeavour, is paramount to our short- and long-term success.

We would like to continue to partner with United Nation and other similar organisations (e.g. USAID, USDA etc.), as well as microfinance and banking institutions.

The former to help us scale the deployment of our solution, the latter to help us deliver low-cost and sustainable microfinance for 'Last Mile' communities.