Lishabora is a Kenyan-based company that provides input and practices, and co-manages outputs for Kenya’s smallholder dairy farmers to enable more informed farm management and credit and banking solution.
Lishabora sources quality-assured dry-feeds and animal health products and delivers them to the farmer, thereby improving access to inputs and reducing cost for smallholders.
LishaBora’s vision is to be the last-mile distributor for rural East Africa, spreading high quality products and best farming practices across the region by harnessing the power of micro-entrepreneurs through business development and credit solutions. It aims to improve the profitability and sustainability of smallholder dairy farming in Kenya through high impact products and services, and through the digitization and formalization of the informal dairy sector.
LishaBora is one of the pioneers in digitizing the informal dairy sector in Kenya; here is an interview Lishabora had with TechMoran that discusses their goals, progress so far and vision for the future.
Tell us about yourselves; your team, your educational and professional backgrounds
After living and working in rural Kenya for over four years, Graham Benton was tired of smallholder farmers being taken advantage of. Founding LishaBora, he set out to disrupt the status quo, and break the barriers that exist between rural agriculture and prosperity. Graduating from Prescott College in 2010 launched him into a career of working as a sailing, SCUBA and marine science instructor in the Caribbean. It was there that he built his desire to have a richer impact and deeper meaning in the lives of his customers. He built his founding team with Emily Achieng, Valerie Wathiong’o and Roylick Macharia in Kenya. Emily is a fully fledged accountant and finance professional who is passionate about championing social economic justice and development. She applies her skills and interests to connect the dots between finance and socio-economic empowerment for sustainability. Valerie is an ambitious and compassionate person who builds strong relationships with LishaBora’s customers to help them achieve their life goals. She holds a Bache7lor’s Degree in development studies from Mount Kenya University and is experienced in managing complex projects to drive productivity improvement. She is passionate about helping others and is actively involved in community outreach programmes including capacity building and mentorship. Roy has a background in sales and marketing with 8 years of experience in Business-to-Customer (B2C) sales in the communication industry in Kenya. He is a people-person who is strongly committed to building new relationships while fostering better social integration and upbuilding of low-income communities.
How would you best describe LishaBora, what does it do?
LishaBora is digitalizing the informal dairy sector in Kenya, representing an annual 1.2 billion USD industry. To empower smallholder farmers with high-quality products and services, we partner with dairy traders, entrepreneurs who buy and sell milk. Dairy traders use our business management mobile application to digitalize their processes, sell our products, and build financial histories for themselves and their farmers.
The dairy industry in Kenya is decentralized and fragmented with over two million smallholder farmers, 85% of which are in the informal sector. Contributing to 7% of Kenya’s 70 Billion USD GDP, and equating to almost 5 billion USD annually, smallholders supply 70% of Kenya’s dairy products, making them key players in Kenya’s agriculture industry and the entire economy. Typically owning 1-5 cows and earning less than 2 USD per day, smallholders are kept below the poverty line as they struggle to produce more than 30% of their cows’ total milk potential, and are constantly taken advantage of by macro-level economics and industries in the formal market. Systemic inefficiency riddles the informal market, such as minimal access to high-quality products, lack of access to financial services, and poor management practices.
By partnering with dairy traders, LishaBora is scaling the impact to these smallholder farmers. Through our business management mobile application, we are digitalizing the daily transaction of traders, thereby reducing the amount of manual, repetitive and error-prone calculations. By collecting data and conducting payouts, the application is creating long-term financial histories for traders and farmers, and for the first time making them bankable by building credit. By enabling traders to sell LishaBora’s high-quality cow feed products, we create a new revenue stream for traders and solve the cash-flow issues facing farmers. Also, our best farming practice workshops empower smallholders with knowledge to increase their productivity.
Our target market is the informal dairy sector, which employees an estimated 45,000 dairy traders and over 2 million smallholder dairy farmers. Each dairy traders collects the milk of about 50 smallholder farmers, by partnering with these traders we are scaling the impact we have of spreading high-quality goods and services to the most disenfranchised.
How does your company make money?
Our main source of revenue is our cow input products, including our Dry Complete Feed Solution “Jawabu”, Vital Maziwa (Minerals), and Maize Germ (Feed Supplement) sold through dairy traders using our mobile business development application. We use forage management and best farming practices as customer retention and marketing tools. With the development of our bi-monthly mobile payout to farmers through dairy traders, we will be able to build credit scores and make farmers bankable. Future revenue plans include charing dairy traders 1% for the admission of loans and payouts to farmers through our app, making the costs proportional to their income. We see this application enabling traders to both buy and sell any products to farmers across East Africa; we are using dairy farmers and traders as a launch pad.
Who would you say is your major competition in this space at the moment?
While LishaBora is the only startup company in Kenya working directly with dairy traders, our competitors are other feed manufacturers and distributors, such as Pembe, however, no other feed companies are interested in their customer’s profitability or production levels. Other competitors include dairy cooperatives in the formal market which collects, processes and packages milk such as Fresha. These organizations are limited in their scope and do not offer farmers full ranges of services.
LishaBora is the only company working with the informal dairy market to digitize and grow a dairy trader’s business. Other startups similar to us would iProcure, a supply chain management company for agribusinesses, and Sidia, a business management company for entrepreneurial agri-vets, however, neither of these companies directly target dairy traders to reach the informal market. Our differentiator is our business management mobile application, a tool that dairy traders use to digitize the daily processes of milk collection, accounting, and bi-monthly bulk payouts to their farmers. We provide the dairy trader with business metrics and data analytics. The data collected from daily milk collection paired with weekly payouts builds credit and makes farmers bankable who have not had previous access to these types of institutions. Through this application, dairy traders sell LishaBora’s high-impact products and services that raise incomes of smallholder dairy farmers.
What is your vision for the company in the next 5 years?
LishaBora’s vision is to be the supply chain platform for rural East Africa, spreading high-quality products and best farming practices across the region by harnessing the power of micro-entrepreneurs through business development and credit solutions. By leveraging the existing trust-based social infrastructure of the informal sector, LishaBora can scale quickly to millions of smallholder farmers. By building partnerships with 50 dairy traders, we see a potential revenue of more than 500,000 USD for 2018. Future revenue sources can be generated from selling a larger range of products and services, such as poultry products, house staples, or farming equipment, as well as charging a commision to use the platform and managing farmer payouts. With the dairy traders building long-term financial histories, LishaBora can be the liaison for larger asset loans from banks, such as milk chillers or vehicles. Using the dairy industry as a launch pad, the issues of informal segments of any sector such as cash-flow and growth-restricting inefficiencies cross many global value chains. While LishaBora is targeting the Kenyan dairy industry through our mobile application, our solution can be applied to other sectors in developing countries such as tea, coffee, or cereals.
What advice would you give upcoming entrepreneurs?
There are really two pieces that I would do differently if I were to do it all again. These are mistakes that I think we made in initiating the business and that we really didn’t see until we were farther along. I think the reason that I made them both was that we were overly confident in the business model that we started with and really at every stage. They are:
1. Get a founding team. DO NOT GO IT ALONE. This has lots of benefits from just moral and having fun with it all the way through being more efficient, having a sounding board, making better decisions, moving faster and being able to achieve more. In the long run, this has cost us probably 1m in funding, from investors who highlighted the lack of a founding team as the only or primary reason that we are not receiving investment.
- A company is an experiment, so act like it. Early on, we tested a lot of things, but the one thing that we did not test was if we were doing the right KIND of business to solve the problems that we found. We were too focused on doing the business to look and see if the business was going to be the one to solve the problem. To that end, it is really important to pivot early and often, don’t be scared to move with the market and find the path of least resistance. However, do not be afraid to take your time as well.