Despite reams of evidence that indicate South Africans are eager to invest and grow their money, few actually take the leap. This is, in large part, because many of the ‘traditional’ investment vehicles, such as unit trusts or ETFs, are complex, expensive, and daunting for first time investors. Having recognised this barrier to entry, Ntuthuko Shezi, a former Accenture strategy consultant, has sought to provide an investment platform that is not only accessible – but that harnesses and grows African resources. His solution? Livestock Wealth: Africa’s very first ‘crowd-farming’ platform. The startup, which seeks to ‘change the way Africans invest’, enables users to invest in a cow that is at least three months pregnant using the website, mobile app or text platforms. Livestock Wealth maintains and cares for each cow on its farms for a monthly farming fee of R295.
As a serial entrepreneur and globally recognised personality, Shezi brings an impressive set of credentials to the project. Earlier this year, he was voted among the Top 20 Most Interesting Entrepreneurs to Watch at the global Web Summit in Ireland. He is a Clinton Democracy Fellow, as well as a Mandela Washington Fellow for Young African Leaders. Livestock Wealth was also one of four businesses to receive R500 000 in enterprise funding from Bank of America Merrill Lynch in a recent BEE pitching evening hosted by AlphaCode.
Livestock Wealth was officially launched in July 2015 at the Global Entrepreneurship Summit in Kenya, and has been attracting local and global attention in recent months.
“What makes the platform exciting is that you can own the cows without worrying about purchasing an entire farm and running it,” explains Shezi. “It's a great place to start due to its simplicity: if you buy a first time pregnant cow for R10,495 from livestockwealth.com, we keep it on our farm and look after it for you for just R295 per month.”
Shezi maintains that each cow should give investors an annual income of between R4000 and R5000 from the sale of its offspring, for life.
“The return is entirely removed from currency volatility and global political events, which generally affect people's shares on the stock market,” he adds. “When the cow has reached the end of its fertile life, we replace it with a young fertile cow (at no cost to the investor).”
He points out that the cow has in fact been a ‘major global currency’ for thousands of years.
“In fact, the stock market borrowed all its terminology and founding principles from the livestock market,” he explains. “When comparing the JSE to cows, an FNB stock is the cow within a herd and the annual company profits / dividend is the offspring born of the cow each year!”
A Bovine Appetite
Despite the challenges around educating the public and convincing investors that the concept works, Livestock Wealth has hit the ground running.
Shezi says that they have sold all 26 cows that were advertised online within three weeks of launch, selling the first four cows within 48 hours. “We have sold a further four cows in the past two weeks to investors who are now on the waiting list for the next batch of pregnant cows,” he adds. “We also have 61 people on debit order to lay-bye their cows over 3, 6, 12, 24 or 36 month periods.”
Looking ahead, Shezi says that the startup aims to manage a million cows on behalf of investors by 2019.
“In this scenario, we can use the full value of people's cows as a tool for them to enter and leverage formal financial services - such as using it as collateral for loans and medical aid - with the ability to buy and sell their cows to anyone, at anytime.”
Technology will undoubtedly play a major role in achieving this mission, and Shezi sees it as ‘the bridge between the cow and the investor.’
“With the technology we are developing, the owner of the cow will be able to know more about the cow (body temperature, location, ovulation, etc) than the herdsman standing next to the cow on the farm.”