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Khula is revolutionising small-scale farming by taking it digital.
This award-winning app allows farmers to send fresh produce to the formal market with the tap of a phone.
As a crowd-sourcing platform, Khula is essentially one big virtual farm comprising over 2 000 active small-scale farmers who collectively supply fresh produce in bulk to large enterprises such as Pick n Pay, RocoMamas franchises and hotels.
Farmers can list their produce and track real-time inventory levels on the app, and can also share logistics costs.
This benefits local truck owners who can register on the app and get notified when a delivery job is available, Uber-style.
Clients can also use the platform to order produce.
The two-year-old Khula was crowned the MTN Business App of the Year 2018.
It also won Best Agricultural App at the same awards.
Khula was co-founded by Matthew Piper, who focuses on product design, strategic vision and direction; Karidas Tshintsholo, who leads business development; and Jackson Dyora, the brains behind the technical aspects of the app.
finweek spoke to Piper about the business.
Where did the idea for Khula come from?
We were inspired while on an entrepreneurial trip to Israel.
We did research and found that 60% of the world’s arable land is in Africa and over half of all small businesses are agricultural-related, yet we don't know anything about these farmers.
We don't know where they are, and we don't know how to efficiently connect them with clients.
The system is very inefficient. We found a lot of meaning and purpose in solving this problem and decided to start the business.
Most farmers on the continent are not connected to any kind of e-commerce or digital platforms, which would allow these businesses to scale and get connected.
This gap is something we found to be a big problem that we could solve.
How did you secure funding to get Khula off the ground?
I started a financial education business in my first year at the University of Cape Town with Karidas, which allowed us to save up a bit of money.
We both put some of the money we had saved over time towards kick-starting Khula.
We also used some equity in the business to get more members on the team and to get things going initially.
Our major overheads are our people.
Much of our model is focused on a shared economy, and we are software-focused, so we don’t have many large overheads.
How did Khula’s first-time use go?
With our first minimum viable product we partnered with a school for farmers at the University of Johannesburg.
We ran a pilot with a focus group of 300 farmers, while also beginning our first trades on the marketplace.
The first step was to spend time on the ground to find the core problems faced by farmers.
The first two problems we discovered were market access (farmers don’t have a consistent or reliable client base to grow their farm) and logistics (farmers don’t have trucks to get large volumes of product from A to B).
Secondly, we designed a prototype of the product and started to put a team together with complementary skills.
I was from an economics and finance background, with a few design skills, so we needed more IT and software talent, which is where Jackson joined.
What sort of challenges did you encounter?
The biggest challenge in the food industry is ensuring the quality of the produce sold on the platform.
And building trust with clients.
We have worked very hard over two years to vet and profile farmers, and on building a rating system that ensures all our farmers follow food safety regulations and have good-quality produce.
How tough is the competition and what sets Khula apart?
There are no dominant platforms in Africa that have gained any significant market share.
Most competition in the future will come from traditional food distributors.
Khula, however, has built quite a diverse ecosystem which includes a marketplace that is more than a workplace.
We have built an ecosystem that helps farmers grow, with other ancillary services which make the business more defensive.
What’s the biggest lesson the founding team has learnt about business thus far?
When we started Khula, we came from finance and economics backgrounds and didn’t know much about agriculture or about building the software ourselves.
We just had a vision and a plan which we thought would work.
From the outset we knew we needed to build a great team with complementary skills to make it happen, but we didn’t have money to hire anyone.
By sharing our vision and challenges with everyone we met, over time we started attracting the right people and having the right conversations.
We now have a complementary team [Khula currently employs seven people] who are shareholders in the business and have taken us far without having to raise funding.
What’s a typical day at Khula like?
We are based in Johannesburg but spend a lot of time travelling to all nine provinces.
Our day is typically spent on the road visiting new farms, or debating new features to be added to the app.
What’s the best business advice you’ve ever received?
‘It’s very cheap and easy to get married, but very expensive to get divorced.’
Finding business partners is almost exactly like a marriage, yet many people take this lightly and end up with many expensive divorces.
What is the long-term goal for Khula?
We want to become a very big B2B [business-to-business] marketplace, with billions in transactions.
We see ourselves as an ecosystem that works to support this marketplace in other ways, supporting businesses in the sector to grow and thrive.
We see ourselves being in all major African countries in the long run, and in other emerging markets.
This article originally appeared in the 23 May edition of finweek. Buy and download the magazine here or subscribe to our newsletter here.
