A trip to Israel in 2015 sparked the idea behind award-winning agritech startup Khula. So says co-founder Matthew Piper.
Khula was last month tapped to represent the country at the 2019 Chivas Venture finals after winning the SA leg of the competition.
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The Johannesburg-based startup, which Piper (pictured above, right) co-founded with Karidas Tshintsholo (pictured above, left) in 2016, offers a marketing and distribution service which helps small-scale farmers bring their products to formal markets.
Khula was founded in 2016 by Matthew Piper and Karidas Tshintsholo
Other than bagging the Chivas Venture SA finals, the startup has also won the 2018 MTN Business App of the Year accolade, as well as the Best Agriculture Solution at the same awards
“We were inspired while on an entrepreneurial trip to Israel — where we were made aware of some of the statistics around agriculture in Africa,” says Piper.
The duo did their research and found figures that claim that 60% of the world’s arable land is in Africa and that over half of the continent’s small businesses are in the agricultural sector.
“Yet we don’t know anything about these farmers, we don’t know where they are and we don’t know how to connect them efficiently 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,” he adds.
Khula, Piper explains, takes a five percent commission on each trade as well a fee for facilitating deliveries through its third party logistics partners via the Khula logistics system.
Up to 2500 registered farmers
Last year, Khula conducted a pilot with 125 farmers in Gauteng and the North West. Over the past 12 months, Piper says “just over R1-million” in trade has been conducted over the startup’s platform.
The startup — which employs a team of five employees — currently has 2500 registered farmers on its platform, and has operations in Gauteng and the North West, with “a smaller number” of farmers in Limpopo.
“However we have thousands in all nine provinces who are demanding the service or have downloaded the app. Our plan is to expand to these farmers in the next 12 to 18 months,” says Piper.
When asked what impact Khula’s made, Piper says some of the startup’s most active farmers have “doubled in size” since joining the platform.
“This is possible through our offtake system which allows buyers to contract farmers in the network to grow for them. This has huge impact on the farmers revenues and the number of people they employ,” he explains.
‘Biggest challenge, greatest strength’
The biggest challenge facing Khula, Piper says, is managing growth to ensure the quality of the produce on the system.
“One bad delivery can destroy trust on the system. We have been very deliberate to move slowly and ensure that farmers build up a track record with us before moving onto new clients,” he explains.
This challenge, he adds, has also become Khula’s “greatest strength” — the startup’s quality assurance processes.
‘Raising first round’
Piper says he and Tshintsholo are Khula’s biggest backers, the co-founders have together invested about R500 000 into the business.
“We have our skin in the game 100% and are currently raising our first round which we hope to close in the first quarter of 2019,” says Piper.
Khula stands a chance to win $100 000 in the Chivas Venture 2019 competition if the company comes out tops in an online poll which will be open to the public for three weeks during April. In addition, the startup could win a share of the remainder of the $1-million prize money if it wins at the global final in Amsterdam on 9 May.
Piper says if the startup proceeds to win funding in the competition, it will be used to expand operations and to vet the waiting list of farmers around the country.
“This vetting and on boarding process is important to deliver on the existing off takes we have with clients,” explains Piper. “We will also expand our software team to bring more of the team on board full time.”
Read more: Jozi’s Khula in running to win $1m after topping SA leg of Chivas Venture 2019
Read more: Supply-chain solution Khula! bags 2018 MTN Business App of the Year grand prize
Featured image: From left to right, Khula founders Karidas Tshintsholo and Matther Piper (Karidas via Twitter)