Crosspoint

We are solving the problem of financial exclusion in Nigeria and Africa as  a which has been made more severe by inflationary pressures, global economic tailwinds and cost of living crisis.  Living financially secure is still something many Nigerians and small businesses struggle with appalling statistics in this regard; a 0.5% Insurance penetration rate shows that many people and businesses in the region remain uninsured, with equally dire statistics for pensions (7% of our adult population) and lack of access loans and other financial services especially for those further down the income bracket. 

Building sustainable lives and incomes has become a global concern with a failure for traditional financial systems to effectively service or capture them. For instance, despite the fact that agriculture accounts for over 60% of the African workforce and contributing 23% to our GDP most farmers for instance remain financially excluded and have little financial opportunity.

These problems of exclusion are closely related to concerns facing businesses and individuals looking to scale their operations (or improve their lives) like rising inflation rates, a broken supply chain and poor procurement practice. 

Procurement is closely related to financial exclusion as majority of resources are deployed towards the acquisition of input for businesses or provisions for the home. This makes it a primary challenge faced by low and middle income homes and businesses who are faced ever increasing prices or costs and declining disposable income.

These adverse micro and macro-economic conditions coupled with currency fluctuations have significantly reduced the ease of doing business and the quality of life of the average Nigerian and in extrapolation much of Africa and the rest of the developing world.

 Although Nigeria has a higher proportion of banked adults than many countries, it also has a high proportion of financially excluded adults at 36 percent. The excluded are predominantly dependents, reside in rural areas, have low education and low proximity to access points.  In Nigeria the government through the bureau of statistics released results of the multidimensional poverty index (MPI) that 133 million people are multidimensionally poor from a total population of 200 million people with most lacking access to basic healthcare potable water and the opportunity to grow their income and access loans and other financial services. Ghana defaulted on its debt in late 2022  and is battling decline of its currency and trust in their bonds. While developed countries may better manage these shocks, developing countries with government, fiscal and infrastructure deficits find themselves in a more vulnerable position even during periods of significant positive global economic sentiments.

We help small businesses and low income communities with simplified community based procurement, procurement financing and financial services. We make them more financially efficient by helping them reduce the cost of procurement through community based or social model and increasing their income by providing access to markets and improving the quality of their output through procurement financing. We are currently working on pilots with local farmers and schools but see the opportunity to significantly scale our solution into further use cases.

We use a combination of technology and strategic programs to achieve our goals. In terms of technology we are building a platform that enables businesses digitize their procurement transactions using a digital wallet, schedule and make procurement orders using a user friendly interface and reduce cost through strategic aggregation with similar entities.

We also offer a number of programs to empower the communities we work with some of which include:

1. An aggregation program to enable low and middle income communities enjoy several benefits from subscription pooling and procurement management through local agents present within their communities or geographic location

2. An aggregation cluster program to enable smallholder farmers acquire strategically planned land and designed farming layout designed to reduce their cost of procurement and logistics and increase their income through farm ownership and process improvements

3. A partner program to work with farming associations and local community leaders to assist in organizing and coordinating the activities of farming communities in their localities while accessing financial services and increasing their earnings.

We serve three categories of users and these are businesses, the individual or the household and government. We help small and medium businesses from technology startups, small holder farmers and training institutes improve their procurement functions and ensure it is better aligned with their short and long term financial goals. For small holder farmers, we use a combination of technology, partnerships, advisory and strategic programs. These small holder farmers lack formal financial access whether you are considering loans, insurance or pensions. Through our farm to table program we are helping local farming communities organize themselves, acquire farmland affordably with processes and mechanization systems set up by our team. We help them improve the quality of their output and increase their income while ensuring our farmers can work sustainably by providing them access to health insurance. The goal of this program is to simplify procurement and procurement financing for these farmers, access to financial services like health insurance and pensions organization and implementing adequate structures to build decent lives for themselves and their families. We also engage their local community through the CAP program  using agents like farming associations, small businesses and other stakeholders to help organize and manage these farmers who due to education limitation may face challenges in understanding our value, accessing our technology and easing the doubts they may have working with foreign . This provides these agents an income in the form of commissions, discounts on farmland ownership and access to financial services like health insurance through Crosspoint. For our pilot with the software training firm we have in the last few months helped with the procurement of better quality learning devices for their students at an affordable cost ensuring a better balance between cost and their budget. For government and their organizations we hope to help them unify procurement, increase transparency (and in effect stem corruption) and ensure more efficient utilization of financial resources. Our final interest area is to help households access many of the same benefits utilizing our value chain relationships save on the cost of everything from fresh produce for fuel for the home. 

 We are uniquely positioned to solve the problem because:

Our decision to tackle and solve this problem is due to the fact that it is one to which we are all familiar. On our team we have all in some way experienced the vulnerability that comes with not being part of the formal financial sector of the economy. We also bring a diverse set of skills and knowledge that makes us suited to solve the problem in a way that is unique, empathetic and practical. Our leadership team has vast experience in multiple sectors from finance, technology, energy, pharmaceutical and banking. Our technology lead Ojo has experience building technology in the banking and fintech space while Olayinka our lead designer has been designing and mentoring product designers since transitioning from the pharmaceutical industry. Mogbitse has experience managing and building systems in energy, retail and manufacturing in addition to previous entrepreneurial experience. Meyiwa is an early backer and financial advisor for the team. She possess a Masters in finance from the University of Warwick with experience managing the finance function in banking, consulting and international finance. Timing and advancements in technology make us positioned to solve the problem using frontier technology tools like artificial intelligence to improve the quality of our proposed solution and current global trends like inflation and cost of living pressures providing a readily available market seeking for solutions to ever increasing costs of doing business and declining negotiating power with investors. Our unique insight is to use community based aggregation to unlock valuable savings to improve the procurement and finance outcomes of our communities. These savings can be deployed towards intuitively accessing financial service products.

We are currently serving two clients through pilots with one active and the other in view.

For our active pilot we are helping a software training institute procure laptops for their student community and growing workforce. Our first order of 50 laptops will be fulfilled in April 2023 with an average annual procurement of 500 devices.

We are also planning a pilot with a number of agricultural partners: an agro-intelligence company and to farming consultancies to help with affordable procurement of agricultural input like seeds, pesticides and fertilizers for their community of farmers and access to buyers for their produce post harvest planned for to kick off in a few months. This will potentially give us access to reach as many as 4000 farmers in the next few months supporting them in the areas of procurement and finance.

Today in Nigeria it is estimated that nearly 133 million people experience multi dimensional poverty. This unfortunately is not a Nigerian problem. This is why we are designing our solution to cater to individuals of all demographics and are looking to make our solution as accessible as possible. Impact will be to turn this 133 million Nigerians into economically empowered individuals by creating a more equitable commercial and financial market for them. This is why we have ensured through subscription aggregation or pooling they can subscribe to our platform for less than $2 a month and save on the costs they spend in buying daily essentials whether for their homes or businesses. And through utilization of relationships across our value chain they can experience savings in the costs incurred in buying anything from vegetables to fuel to power their businesses making them less susceptible to government failures. Governments are not left behind as we intend o help them unify their procurement and reduce corruption from this function unlocking cash savings that can be invested in the development of their economy. Also economically empowering their citizens leads to less dependence on government infrastructure and aid creating a win-win scenario. In all we want to distribute at least 10 million financial products especially pension and insurance in the next 5 years in Nigeria with plans to scale beyond Nigeria.

Some of my motivations for applying include:

1) Learning: I am a firm believer in continuous learning and being part of the solve network offers me and my team the opportunity to learn from her network of professionals, intellectuals and entrepreneurs who will help us greatly reduce our learning curve as we embark on the path on which we have set ourselves to thread. I believe a combination of our experiences and my teams passion to solve the problem of inequity in finance using procurement will help us implement a model that significantly improves our shared outcomes and those of the community whose problems we are trying to solve 

2) Network: Leveraging on the network of afforded by being part of the solve program we believe will help us easily identify customers, partners and markets which may drastically reduce our learning curve.

3) Scale / Impact: Coming from Africa and Lagos though unfortunate we understand the power of platforms to scale stories, dreams and impact and we believe Solve provides us this opportunity.

Regardless of the entity under consideration  (whether government, business or individual) procurement is a major pain point and takes a significant amount of our finances. Crosspoint helps simplify procurement for our users and ensures it aligns efficiently with their financial goals. We employ a combination of technology and business model optimization to achieve this for our community of users. For instance in our agricultural use case we simplify procurement of agricultural input like seeds for farmers in our network cheaper through aggregation of their supplies. We also partner with them to help them acquire relevant equipment they require to digitize operations through aggregation and low cost lending and finally, we help them increase their income through programs like F2T which helps them unlock new income opportunities by helping manage the sale of their raw produce to processing partners. This will significantly reduce their cost of operations from renting this equipment at exorbitant prices ensuring the long term maintenance and insurance of the said equipment. We believe this will lead to rapid digitization of our agricultural processes, more efficient distribution of raw produce to increase income for the value chain and improve the quality of life of the farmers through product and personal insurance like health.

The average African farmers income may vary widely depending on the region, crops grown, farming practices, and other factors with many small holder farmers living below the poverty line.

According to a report by the International Fund for Agricultural Development (IFAD) in 2020, the average income of smallholder farmers in sub-Saharan Africa is estimated to be around US$1,300 per year with some farmers earning less than $1 per day. This is despite the fact that farmers income are often unreliable and impacted by factors such as weather conditions, pests and diseases, market fluctuations, and other challenges with significant barriers to accessing finance, inputs, and markets, which can limit their ability to improve their livelihoods and escape poverty. They are also excluded from basic access to healthcare and other personal financial services like pensions. Crosspoint impact focus areas include:

a) De-risking the operations of our partner farmers by providing access to insured input like seeds, improving their practices through education / advisory and  by enabling low interest acquisition and maintenance of modern farming equipment

b) Improving farmers income by optimizing their sales process by diversifying their customer pipeline and  providing access to financial services like health insurance and micro pensions from savings in their procurement and sales process

Our goal is to significantly improve the farmers livelihoods through and provide them access to affordable financial services using our technology and business strategies. 

We will be looking to improving the procurement, sales and finance outcomes for a diversity of small and medium businesses with a target of 2 million businesses on the next 5 years in Nigeria with plans to scale across Africa

We will be measuring a number of factors:

Social impact: We are measuring daily the ways our business and strategies improve the lives and livelihoods of our buyers especially by means of improved outcomes in their social conditions within their businesses and households. We are particular about improving access to financial services especially health insurance and pensions.

Economic impact: We are measuring the average increase in farmers income and those of other buyer communities through savings on order aggregation, sales optimization , cash and access to other financial services. We will also be helping them improve their economic outcomes through improvements in their practices and affordable introduction of technology to their processes.

Financial impact: Our goal is help our users save on their procurement, access affordable finance and improve their income .

Environmental impact: Improvements in farming practices, advisory on use of fertilizers and other chemicals will lead to positive environmental impact .

Societal impact: Beyond farming we are working with a diverse number of organizations in different sectors like education, chemicals and building and construction. We will be helping these businesses improve their procurement and finance processes like we are doing in farming.

Today's primary procurement and inventory management philosophy is based on the 'Just in Time' inventory management ideology introduced by the Japanese in the 1970's. While this greatly increased efficiencies in manufacturing in the ensuing years it has proven over time to be financially inefficient and prone to driving inflation. This has further driven the demand from customers to get products at the fastest possible time with the '30minute' and '10 minute' delivery models. Our model hopes to introduce a new approach to procurement and inventory management which we call the 'time based aggregation model'.

With this model using technology based scheduling and planning buyers can give suppliers prior insights to their buying timelines helping suppliers plan better, they can also use this time to aggregate their needs with other buyers improving their ability to negotiate better prices / discounts with suppliers creating a win - win scenario for both parties. Interactions with local stakeholders we have seen significant interest across board for our solution but have only been hampered by our ability to deliver the product faster due to the lean nature of our team.

We have also attracted significant interest from larger organizations who are currently monitoring our trajectory and partnering with us in order to provide us resources and in return ready to introduce us to their network of clients and partners.

We consider ourselves fortunate as we believe we are still early in our journey but consider the pain big enough to work on daily.

Our solution is technology driven with a web and mobile application that helps users manage and aggregate their commercial and finance activities on a single interface. Aggregation gives them access to group purchase helping them earn discounts that they would naturally not access when transacting alone. Our business buyers, suppliers, merchant and government users can also unify and manage their organization wide operations digitally on our platform. 

Our technology helps our community of users achieve:

Mobile wallet: Each user has a mobile wallet that helps them perform transactions digitally, manage and track their spending.

Community building: Using our community building feature called circles our users can find and join buyer communities with entities with similar procurement and financial service needs where they can transact together with them as groups.

Procurement: Through our signal procurement interface our users can schedule their procurement, aggregate purchase with other buyers, manage volumes and procurement to meet their needs

Financial services: We offer financial services like insurance, pension and in the future loans to our users in bulk discounted units making it easier for our users to access these services at lower prices.

Our team is diverse and inclusive in many ways

Gender: made up of 5 male team members and 2 female members. We have throughout our journey worked with a good number of female colleagues who have since transitioned into other opportunities.

Cultural / Ethnic: While we are still a small team our hiring decisions have been determined solely by fit and merit and not on by ethnic or cultural considerations. While I am from the Southern minority tribe of the Itsekiri (Delta State) people (South-South) a larger majority of the team is from the South-Western majority tribe of the Yoruba people (5 members). Ani our other front end engineer is from Akwa-Ibom state and we ensure everybody feels welcome and are simply committed to connect based on our shared humanity and belief in our mission. We actually anticipate looking to hire more people from other geographic regions as we grow and evolve into the team we want.

Leadership: Leadership roles are not limited to any specific gender class with Olayinka a female pharmacy graduate turned product designer leading our product design team while Ojo a male software engineer leads the technical team.

Experience: We hire based on talent and potential and not based on age, experience or education. Titobi one of our software engineers is a gifted 18 year old who is yet to purse a formal University degree. We also have two students who work part time with us while they study in their local Universities.

Whether working with educational institutions, businesses or manufacturers we help optimize their everyday procurement to ensure efficient deployment of capital. We earn our revenue using a double pay membership model with a subscription fee and a reasonable transaction cost.

Subscriptions allow users access to our buying community directly  or through partners as with our CAP program.

The CAP program especially designed to enable low income and communities with literacy and access issues benefit from our platform through local partners within their communities and pool subscriptions. Subscription pooling reduces the cost of subscriptions for these communities to $1 / month or $13 / year. In our work with farmers for instance, subscriptions mean they can be onboarded under CAP partners, buy affordable land in one of our clusters , access quality insured input and enjoy access to health insurance. Through our Farm 2 Table program we work with these local farmers to improve the quality of their raw produce from quality input and processing support to improve their income. The goal is to enable our partner farmers scale their operations further up the value chain and earn an income from table or near table output. This is how closely we work with our partner communities to improve their financial outcomes.

Our initial funding is equity based with contributions from the founding team, friends and family and early (pre-seed) investment. We are currently hoping to raise a pre-seed / seed extension round from venture partners. We will also be exploring grant funding especially in to support some of our strategic initiatives in the areas of low interest lending and agricultural solutions in our work with smallholder farmers. Our business model means that we will earn significant revenue through our business activities in our interactions with customers in the form of subscriptions, margins on products, interest on procurement financing and other lending activities and broader financial service initiatives. Programs like our Farm2Table are designed to partner with local buying communities to acquire processing and drying equipment to enable them process their raw produce and sell higher quality products. For this program we are considering two models: A shared ownership model (where Crosspoint co-owns the assets and shares income with buying communities ) or a model where asset is transferred to buying communities on reaching specific operational and financial milestones.

Since we starting we have successfully raised a $25,000 pre-seed round from Semicolon Ventures ($5,000 disbursed to date) and $15,000 from a combination of my personal savings and a family and friend round. We have also since April 2023 launched operations with a procurement pilot delivering laptop devices to students in Lagos for a software training institute and financial services for their students.

We are currently doing due diligence for our agricultural use case where we are working with local communities in Ogun state Nigeria to assist farmers in the affordable procurement of farmland, quality agricultural input and health insurance. We are designing and planning with them to build an agricultural aggregation cluster in land allocated by local community leaders for the program.