Jehiel Oliver, Founder and CEO of Hello Tractor explains how they’re leveraging technology and innovative financing to help Africa’s farmers close the yield gap between what they grow versus what the global averages are across key commodities.
Hello Tractor is an agricultural technology company connecting small-holder farmers to farm equipment owners with excess capacity.
Their technology involves a small tracking device that goes onto the tractor; it gives the farm equipment owner the ability to remotely monitor and manage all aspects of their tractor, including location, how much the tractor is being used, fuel consumption, theft protection — which is a big issue — and maintenance needs of the tractor.
Farm equipment owners can opt into entering their equipment into a marketplace and improve efficiencies for all concerned.
This is a fascinating episode shedding light on how business can be a force for good and address a range of issues from more efficient food production to empowering local communities and helping to transform Africa into a global breadbasket.
About Jehiel Oliver
Jehiel Oliver is the Founder and CEO of Hello Tractor, an agricultural technology company that connects tractor owners with smallholder farmers in need of tractor services.
At Hello Tractor, Jehiel is responsible for overall management and strategy. He has been honored with numerous awards for his work in social entrepreneurship including being recognised by Foreign Policy Magazine as a Top 100 Global Thinker and a World Economic Forum Circulars inaugural cohort member.
He was appointed under the Obama Administration to serve two years as a member of the President’s Advisory Council on Doing Business in Africa, where he most recently chaired the technology subcommittee.
Prior to Hello Tractor, Jehiel started his professional career in investment banking then consulting and. He lives with his wife and two daughters in Nairobi, Kenya.
Transcript of the Interview
Alberto Lidji: Today, it's an absolute pleasure to welcome on to the show, Jehiel Oliver, Chief Executive Officer of Hello Tractor, who is joining us from Kenya today.
Hello Tractor is an agricultural technology company and also a great example of private enterprise driving forward the global sustainability agenda.
They connect small-holder farmers to farm equipment owners who have excess capacity and they do this through technology and really innovative financing. And, they're creating a multifaceted marketplace that's really interesting, growing, and is oftentimes attracting unconventional stakeholders who might be under-banked, underserved, and now are finding that, actually, you know what, here's a really great opportunity to leverage their skills and benefit themselves and the broader society.
So with that further ado, Jehiel, a big heartfelt welcome onto the Do One Better Podcast today.
Jehiel Oliver: Thank you, Alberto. It's a pleasure to meet you.
Alberto Lidji: Excellent. So you're out there in Nairobi, Kenya. I'm here in the UK. I think we have a few hours time difference but nothing terrible to overcome. And you're the CEO of Hello Tractor.
I know a little bit about your work, but I think most people listening to this show probably do not. So why don't we kick off by finding out a little bit about Hello Tractor, what's Hello Tractor all about?
Jehiel Oliver: Sure thing, Alberto. So Hello Tractor is an agricultural technology company. We connect small-holder farmers to farm equipment owners with excess capacity. And we do that through technology.
So we start with selling a small tracking device that goes onto the machine. It gives the farm equipment owner the ability to remotely monitor and manage all aspects of their tractor. Including location, how much the tractor is being used, fuel consumption, theft -- which is a big issue -- and maintenance needs of the tractor.
And then finally, they can opt into entering that equipment into our marketplace where we have community based agents using a separate Hello Tractor application to book services on behalf of the farmers in their community. And, they do that for a small commission.
In that way, small-holder farmers get access to equipment even if they're digitally illiterate. But they get affordable and timely access. And then as a farm equipment owner, you get to earn more with your equipment. We like to think of it as a win win.
Alberto Lidji: And now you are for-profit firm, but also you have a big heart and from having spoken with you before, I know that you're quite keen on doing good and you view your work as integral to the wellbeing of the society around you.
So why don't you give us a little bit of your take on the good that you guys are doing and why you are of relevance to the broader sustainability agenda?
Jehiel Oliver: Yeah, so we definitely are rooted in social impact. We do believe that for deeply entrenched large problems, commercial solutions have greater potential to scale to the point where you're solving the full problem.
It's a bit more complicated and we approach it that way, but that's the approach that we took. And that's the approach that's allowed us to crowd in other commercial players who have complementary products, who have capital, who work in adjacencies that now, through Hello Tractor, can plug into a marketplace that was often considered unattainable.
And I think if we continue down that pathway, we stand the chance of solving the real problem, which is closing the yield gap -- what our farmers grow versus what the global averages are across key commodities. And that's a massive problem to try and solve. So we needed all the help we can get, private and public.
Alberto Lidji: Now you mentioned closing the yield gap, and we're going to talk a little bit about the economics of the environment in which you operate. It just so happens, I've just gone live with the podcast episode I did with our mutual acquaintance. Felix Brooks-Church of Sanku, and we spoke a lot about reaching that 'last mile' in rural parts of Tanzania, in his case, with fortified foods.
Give us a little bit of an understanding of the economics of the realities of where you're operating out there in Kenya right now and where you would like it to be, hopefully, in the not too distant future?
Jehiel Oliver: Yeah. I mean, we got a lot of work to do. But if you look at the markets that we operate in, and I think Felix is also affected by this, these are smallholder agricultural systems, which means you have land being managed by farmers who are working, you know, less than five acres.
And it is very difficult for the agricultural system, the commercial agricultural system, to provide products and services in a profitable way to such small farmers.
There's been a tremendous amount of consolidation in global agriculture. Most of the food that we eat comes from broad acre farmers, you know, thousands of acres under management. And our reality is the complete opposite. And so one of the benefits that we bring to the global food system and certainly to the markets we service in Africa is organising that last mile into what we refer to as distribution clusters. So that when a tractor owner comes out to service a village -- the farmers in that village have been already preorganized by the agent assigned to that location. And the tractor owner can, you know, service a couple hundred acres over the course of a month to make that trip out to the village worthwhile. And, you know, our job is to make a couple hundred acres look as close to a single 2,000-acre farm as possible.
We use a lot of data tools and software products to accomplish that goal. But in organizing the last mile into these distribution clusters, we believe we can... it's a huge unlock for not just the efficient delivery of tractor services, but also for the distribution of seed, fertilizer, agronomic advisory, harvesting services and go to market for those farmers and they're and the crops they're growing.
And that's, you know, economies of scale is universally accepted as a good thing in business. And we're using the opportunity to plant on time and cultivate the land that you have access to through mechanisation as opportunity to rally in these last mile markets into these distribution clusters. Because it's an attractive incentive for the farmers. Once they're organised, we can sell and distribute all sorts of products and services beyond just the tractor.
Alberto Lidji: Fascinating stuff. And so on the one hand, you have the tractor owners. On the other hand, you have the land owners, oftentimes, very small plots of land. You also have those third parties, those agents, maybe matchmaking, you guys... the platform underpinning a lot of the stuff, the tech underpinning a lot of stuff and are the market-creator in many respects as well.
So it seems like a fairly complex, multifaceted ecosystem and space that you're trying to drive forward.
Where do you start once you realise that there's a gap and a need? And then give us a little bit of more granular insight into those specific stakeholders -- the tractor owner, the agent, the land owner and how they all come together.
Jehiel Oliver: Yeah. So we start with the tractor owner because there's just not enough liquidity on the supply side of our double sided marketplace. So getting as many tractors as possible as the starting point is mission critical for us. And we adopted a strategy that's well understood in Silicon Valley called, you know, 'come for the tool, stay for the network'. In our case, the tool is we were first to market globally for fleet management for this category of farm equipment, lower-horsepower farm equipment.
We were the first to connect those machines to the cloud and build bespoke software for the unique needs of that farm equipment owner. But that was the hook to get the supply onto the platform. And then once we had the supply we would observe the activity and usage rates of each piece of equipment... and approach our customers and say, hey, Alberto, your tractor is idle for, you know, from May to September, we have some opportunities about a 150 km away from where you normally operate to bring that tractor online during those months and you stand to earn, you know, $6,000 extra.
And so and it was that community-based booking agent that organised that work on behalf of you, Alberto. And we were the ones that connected that supply and that demand through our technology in our matching algorithms.
I think the the cool thing to call it today is AI. And so we kind of facilitate that exchange of excess capacity and pent up demand. And it is a scenario where all the stakeholders benefit.
The last piece that I didn't get to touch on and just not to add further complexity... so the booking agents that are based in these communities, some of them have done such a great job of organising and originating demand within our booking application.... We started to approach them back in January of last year and say, hey, you can actually be a tractor owner and we designed a financial product to create a new category of tractor owner within this ecosystem; previously unbanked individuals, a ton of women who generally would not have access to credit who booked their way to now owning tractors. It's $40,000 worth of equipment that is a complete game changer for their community. As well as for the broader marketplace, looking for opportunities to invest in a commercially sustainable way to unlock that value in the last mile. So we started that program in January last year, we were supposed to test with just $500,000 in the first six months, we did $5 million.
Zero non performing loans... Those tractor owners as a subset of the broader network of tractor owners that we work with are significantly outperforming the other tractor owners on the platform.
And I think what we're proving is there's so many opportunities in these markets. You gotta be smart. You gotta think about these... you go to market in a very different way. Right. Even things like credit underwriting... it's difficult to use conventional methods to underwrite somebody who had no bank relationship. Can't use credit score. Can't use your bank account information. But if you can use data in clever ways, you can uncover fantastic opportunities.
And I think that is one example of the many opportunities that do exist in sub-Saharan Africa. And I hope that can be a clarion call for all sorts of commercial players to come into the market commercially and put their balance sheets to work.
Alberto Lidji: Fascinating. And so, I'd love to know how it all unfolded in terms of, okay, you identify that there's this gap, this is the reality in the market. And then you go from that to conceptualising what a software solution might look like, and then what the stakeholder management might look like -- in other words creating that marketplace -- and now even scaling up or diversifying into things such as financial services, which maybe you didn't initially envision when this whole thing went off initially, right? So, what's that journey been like?
Jehiel Oliver: So the funny thing is it's... so I come from finance, right. I started my career in in investment banking. And that was my starting... finance was my starting point for this, I said, look, through a collaborative consumption model, you can profitably finance tractors in the ecosystem, as long as that tractor is being allocated across different communities. And so that was actually my starting point. And I literally started with an Excel financial model, and just mapped out the unit economics of service delivery, cost of fuel, cost of tractor, cost of finance, and that's where I was comfortable, living in Excel.
And then when I took that Excel to the real world, talked to some tractor owners, eventually moved to Nigeria, which was our first operating market, and our tractor owners, they all responded kinda similarly... 'You want me to send my tractor to some village on the other side of the country, how do I know I'm not gonna be defrauded. Right now, my tractor is just around the corner. I can drop in and see how my operator is using the machine'.
And so that's when I knew we needed a fleet management solution for remote monitoring and management of the machines. And as a non-technologist, I called up literally... I called up LoJack, which is the...
Alberto Lidji: Tell us what it is. I know what it is, but tell us what it is...
Jehiel Oliver: So, LoJack is a fleet management solution for cars... It was a technology company started in the US, very popular in the US. So I knew about it because I used to own a car in the US and pretty sure...
Alberto Lidji: And it could track your car if it had been stolen...
Jehiel Oliver: It could track the car. So, I called them up and I said, look, like, I'm a non-technologist.... I'm also a weirdo on LinkedIn... so I'll reach out to just about anybody.
I found the right person, reached out to them and said, hey, I need to be able to track tractors. They move like, let's say, oil and gas vehicles, high value cargo in the rural areas. You got anybody that tracks oil and gas in Nigeria or oil and gas... And, you know, Nigeria being a big oil and gas country. And they're like, well, we don't but we have partners that do. And they introduced me to a partner. That partner introduced me to someone else. And eventually, out of that conversation came an MVP. That MVP gave me just enough to go into the market and start giving that technology...
Alberto Lidji: .Tell us about an MVP.
Jehiel Oliver: Yeah. So the MVP is a minimal viable product and basically the most basic form of technology product you can imagine to go to market. And you do that to collect insights and really start to build out all the bells and whistles on top of that. And so that's what we did. We hired a consultancy to build that MVP to start. We didn't hire an in-house technology team. And that got us enough to go into the market and start testing.
As we started to test and learn more we started to build out a technology and infrastructure in-house to support the existing MVP product while building out those additional features and we prioritised hiring local engineers that both understood the market as well as know how to write lines of code. That was an early insight that we got right, which was prioritise local talent over folks coming from outside with fancy CVs.
And we were able to really build a lean, but incredibly aggressive and insightful team that quickly saturated the Nigerian market. Within two years of launching that product we had about 50% of all tractors in the country on our platform, which was an indicator that we needed to open up a second office, which ended up being Nairobi, which also aligned with my wife and I having our first daughter, so we took a gap year in Washington DC to get comfortable with being new parents and then moved to Nairobi, opened the second office, and then it was off to the races as we began to scale the technology, open up new countries, and add new features, including the pay-as-you-go tractor finance that I talked about earlier.
Alberto Lidji: Wow, what a journey. I know you're from Cleveland, Ohio, in the US, originally. But here you are in Kenya. And that journey, I mean, it doesn't seem to be the most intuitive, as it were. Right. I mean, did you know that that's where you were going to end up, in Kenya? Did you know that you wanted to do something.... because you were working at a bank in the US. But most people who start in that field in that country don't necessarily end up in some sort of entrepreneurial venture across the world.
Jehiel Oliver: Yeah. Definitely an unconventional journey. But I think the undercurrent of my entire career was wanting to do work that was meaningful, purpose-driven. And I saw a career in investment banking as, you know, most people are attracted to, you know, it's a financially lucrative career. It can be.
My timing was off because I started the job and then two and a half years later... three years later, we were in the midst of a financial crisis. But for me, I knew I wanted to build up a skill set that could be valuable, and I know especially high finance is a part of the finance industry that the global poor have not had access to. And picking up that skill set could be valuable, and I didn't know how. But it turns out, you know, understanding and managing the capital structure for large companies, that skill set can also be applied to building debt portfolios to finance tractors in the emerging markets. And the modeling and financial engineering to make that work is... there is some relevance there.
And so that's how I kind of went from, you know, traditional finance to deal structuring and micro finance to then working in agriculture. That's where I made the observation that building solutions for farming was really important because the global poor earn their income on the farm overwhelmingly. And so, you know, Hello Tractor was born out of that.
Alberto Lidji: I think you mentioned you started off, within finance, it was debt capital markets, if I if I remember correctly?
Jehiel Oliver: Correct. Yep.
Alberto Lidji: Right. Nothing to do with agriculture and nothing to do with software development. So I guess both of those things sort of... you tacked on, but it's interesting that the whole thing started off from a financial model on your Excel.
Tell me about the financing of Hello Tractor then. Are these VC folks from the West Coast in the US? Are they local to Nigeria and Kenya? Is it a mix? Who's financing this and how easy or challenging was it to try to get folks to sign on to your idea?
Jehiel Oliver: Yeah. I think that's where the training and finance was also a benefit in how we manage our cap table, how we manage the type of investors that capitalise the company.
We were very thoughtful about having patient capital in the company because we just did not know, and we still don't know when we will solve this problem. And we don't want an artificial finish line placed in front of us. And oftentimes with venture capital, unless you're lucky enough to have an evergreen fund, which isn't time-bound, most VCs have a ten year fund life.
So whether you're done playing around with your company or not, they're gonna need to see a liquidation event at the end of their fund life, which can prematurely constrain a company. And so we avoided that. But not only do we not know how much time we need, but we also need investors who can bring more than capital because we're not solving small problems and we can't carry all this water on our own.
And that led us to really identify players in the industry with appetite to invest, who could also bring real strategic value. And not the stuff that you see on VCs websites, but real meaningful value, meaning they're in the supply chains, they understand from a technical perspective the products that are being sold and bring wraparound services to those products like tractors. And from that, the relationship with John Deere was born and they're now our biggest investor.
And the financial capital is the least of the value that they bring. We have a dynamic team over there that we partner with on everything from how to better train operators to protect equipment and make sure our farmers get the best services possible to maximise their yield, to using their balance sheet and credit scoring, to unlock cheaper capital on our debt portfolio through credit guarantees and other forms of of credit enhancement.
So it's a broad range of capabilities that as a small company we couldn't afford to have that in-house, but we have now the strategic partner that can bring those resources to bear. And I think that's a playbook that startups in this space... And when I say this space, I mean, agriculture, emerging markets, it's worth taking a look at.
It's a very unconventional path. I'll be the first to admit that. The easy thing would be to talk to a VC and especially over the last five years the VC industry has been just flush with cash and it's tempting. But, you know, disciplining yourself to make sure you have an investor that aligns with your view of the market and the direction of the market and the kind of opportunity that can exist if you just keep pounding your head up against the wall eventually you can make headway. And that's what we did through that relationship. And we have a number of other investors that fit that kind of profile.
Alberto Lidji: Great stuff. And so you're... I would characterise things as... you're in a growth mode. You're in an innovation mode. Bringing in new products or services into the market. Where do you see success for you in the next five years? What's that look like for you?
Jehiel Oliver: So I'm going to say something crazy here...
Alberto Lidji: Go for it because that's what we like.
Jehiel Oliver: But since this is such an intimate conversation between just two friends...
Alberto Lidji: -- Yeah... and a few other folks listening in!...
Jehiel Oliver: I believe that Sub-Saharan Africa could be a six global breadbasket. If you think about where we are from a global food system perspective. We've had a tremendous amount of disruption over the last few years coming out of the pandemic. And the supply chain disruptions from everything, from freight to grain reserves being depleted... And then we had the war in Ukraine, which further compounded the supply chain disruptions because the Black Sea port in Ukraine and Russia is a global breadbasket. We only got five of them today, and that's one. And then third, the third leg of this stool or the trifecta is climate change. And erratic rain falls, coupled with over-drying in certain areas. Northern India had a tremendously bad year last year and they were supposed to have a bumper harvest. They're a big producer as well...
That signaled to the global market that we need to strengthen food system resiliency. And there are pockets of Africa that have tremendous amounts of water, fertile soils, more labor, still labor constraints, but far more labor than you'll find in the Midwest of the United States, for example. But they just need some of the basic things to bridge that productivity gap. And mechanisation is a big part of that story, and we wanna rally the broader market around what we've been able to do in coordinating the last mile to close that yield gap and establish these pockets in Africa as the sixth global breadbasket.
And I think that's something we can accomplish in five years. And I think the real question is how do we do it in a way that is respectful of our environment and future generations. So doubling down on conservation, agriculture, regenerative agriculture, smart water resource management, so we're not depleting our water tables. I mean, these are things that I think are also well understood and present not only an opportunity for us to establish Africa as a six global breadbasket, but do it in a sustainable way, and that's a real leapfrog opportunity for the region.
Alberto Lidji: Excellent. You know, as someone who approaches the the global sustainability agenda from a philanthropy perspective, social entrepreneurial perspective, a business school perspective, I can't tell you how much I have been enjoying the last half hour with you. Really great chat, really insightful. And I love the can-do attitude. I love the creative thinking. I love the tangible detail that you're giving us. So thank you for that.
Before we part ways today, let me ask you also for a key takeaway. What's that one thing that you'd love for the audience to keep in mind after they finish listening to today's episode?
Jehiel Oliver: Well, I mean, top of mind is, you know, Africa as a region is open for business. I think that this is a part of the world that has been characterised, I think by philanthropy -- and philanthropy has its place -- but philanthropy can be catalytic into commercial success. And that's what I think we are now in a position where we're starting to see real commercial opportunities to bring dignified work. And because there's not as much muscle memory in industry in this part of the world, we can do it the right way. And we can set up a blueprint for sustainable, scalable businesses that are also respectful of our environment today and into the future.
And we wanna invite those who have capital, who have intellect and a capability to come into the market and see these opportunities for what they are.
And I just think, you know, this is a place where I can feel good for a couple minutes by hitting a donate button, which is nice, and that's important. And again, it does have place... But I think what we also need is real industry coming in and respectfully engaging with these markets. And so if I can at least help spread that message, I think that's a secondary benefit to the work that we do at a Hello Tractor.
Alberto Lidji: I love it. Jehiel, thank you so very much for joining us today on the Do One Better Podcast.