Hello Tractor, a social enterprise that produces, distributes and helps lease smart tractors to farmers in Africa, is raising $500,000 in convertible notes.
The service, which is known as the “Uber of tractors” in reference to the taxi service, started as a leasing fund but soon developed an ownership model for cash-poor farmers to purchase tractors. Hello Tractor provides the upfront cost of buying the tractor alongside local banking partners. Tractor owners then pay back the cost over a certain period, aided by the Hello Tractor system which matches them with local farmers that need to lease the tractor for their own land.
“The whole leasing transaction is seamless as it is all handled through the system using mobile money,” said Jehiel Oliver, the founder of Hello Tractor, who is now based in Nigeria. “A farmer will text for a tractor, it is then scheduled through the booking platform and they pre-pay for. Then the smart tractor owner is notified, gives his services and then the payment is released when the job is completed. Hello Tractor takes a small commission on that deal.”
“It’s a really cool ownership model that can get lots of tractors in the market, remove risk from balance sheets and empower an entire network of farmers with income generating assets.”
Hello Tractor also prioritises women farmers as they are the majority growers. “It is a great opportunity to get these assets to people that need them the most but are often pushed out of the formal market,” added Oliver.
The company was launched out of a venture competition at the University of Chicago, which it won along with some funding and pro bono support for administrative services such as legal help. The company has also received investment from CARE International, the aid organisation, and Point of Life, a development organisation started by US presidents.
The company is getting interest from impact investors who see the social value of the platform but also like the workable business model, said Oliver.
Oliver thinks that soon the business will be able to fund itself and pointed to the fact that only 4 percent of Nigerian demand for tractors has been met.
“The majority of farmers are smallholder farmers so it doesn’t make sense for individuals to own and use tractors for their own farm, so our solution gets tractors to smallholder farmers and connects them with others who need the service. It is great for co-operatives to share a tractor in a transparent and legitimate way,” said Oliver.
The smart tractors cost around $3,500 each including a till attachment.