This app is like the stock market but for agriculture – this is how it works
The lowest you can invest is R100 to buy a moringa tree.
- Like in a stock market, you can buy products like macadamias and moringa and get returns.
- Fedgroup introduced impact agriculture to South Africa over three years ago and now has around six assets that people can invest in directly.
- The latest is a stack of hydroponically grown lettuce, but you will need to have R75,000 to purchase it, as the product has high yields.
- For more stories go to www.BusinessInsider.co.za.
Over three years ago, Fedgroup pioneered the early days of impact agriculture in South Africa with its application, allowing people to venture into alternative investments such as investing in fresh produce and renewable energy sources.
The concept is similar to the stock market, but with agricultural commodities as assets that investors can buy. Investors can buy an asset right on the app or a mix of them and watch them grow while skilled commercial farmers take care of the products.
Speaking to Business Insider South Africa, Fedgroup CEO Grant Field said the company wanted to create a streamlined investment platform that potential investors could easily understand.
âWe were frustrated with people investing in complex instruments that they didn’t really understand; they had no idea what the fees were and they had no idea what they were investing in, âField said.
âIf you think of an investor, a retail investor would generally invest in a fund, but very often funds invest in funds and other funds invest in funds. Very often people don’t even know; not even the funds know where their money is going, âhe said.
He added that Fedgroup’s model offers the advantage of “reducing all those layers” that exist in investing.
âSo when you come to invest your money, you are investing directly in the asset that a farmer is looking after on your behalf. So we offer higher than normal returns because there are no additional costsâ, a- he declared.
Its first asset was solar panels that investors could buy and then lease from commercial companies. This allows investors to earn monthly returns based on the amount of energy produced by their panel.
It then expanded to add more products on its app, including blueberries, beehives, macadamia nuts and moringa, grown on sustainable farms across the country. The crops are mainly grown on behalf of the investors, and they earn income from a portion of the sales made from the crop.
âWe come up with what we call an internal rate of return, you’re basically buying an asset, which at the end of the period isn’t worth anything; but the internal rate of return takes into account that you get all your capital back, plus the return we’re announcing, âField said.
How the Blueberry active works
The blueberry asset.
The blueberry asset.
The blueberry asset.
Each asset has a stipulated expected return, and returns are calculated based on the life cycle of the product.
Fedgroup’s newest asset is vertical lettuce which is grown hydroponically. The stack, which promises a yield of 14% per month, includes 82 lettuces harvested every 21 days. The buyers buy the lettuce and some go to the farmer.
A stack of lettuce will set you back 7,000 Rand, but investors must have at least 75,000 Rand on Fedgroup’s impact farming apps platform.
Among its asset mix, lettuce offers the highest returns, but like any investment, diversification is key, Field said.
âLast year we had two Black Swan events where frost, a century old event, affected a large part of the blueberry plantation. .
The lowest investment you can make is R100 which can get you a moringa tree, but you need to have at least R500 on the platform to buy.
Its most coveted assets are the beehives which are always out of stock. They are so popular that Fedgroup has set up a unique queen breeding program, which is also one of the first in southern Africa. Since the launch of impact agriculture, Fedgroup has grown its swarm to around 102 million bees.
The company has ten new products in the pipeline, including an asset that can be grown to produce recycled plastic, and allow customers to invest and generate a 0% return; “but they will get all the environmental returns, [because] we recognize that some people are not there for a financial return. “