IBM Africa and Hello Tractor pilot AI/blockchain agtech platform

IBM Research and agtech startup Hello Tractor have developed an AI and blockchain-driven platform for Africa’s farmers. The two companies will pilot the product in 2019 through an ongoing partnership co-financed by IBM.

Dubbed Digital Wallet in beta, the cloud-based service aims to support Hello Tractor’s business of connecting small-scale farmers to equipment and data analytics for better crop production.

“Agriculture is a complex industry that can have so many different variables. We’re bringing a decision tool to the Hello Tractor ecosystem powered by AI and blockchain,” Hello Tractor CEO Jehiel Oliver told TechCrunch.

The startup joined IBM Research to demo the new service at Startup Battlefield Africa in Lagos.

Available to Hello Tractor clients, the online platform will use a digital ledger and machine learning to capture, track, and share data, while “creating end-to-end trust and transparency across the agribusiness value chain,” according to an IBM release.

Digital Wallet will draw on remote and IoT-based weather-sensing methods and AI to help farmers determine crops and inputs, choose when to plant and optimize and predict crop yields.

The cloud-based dashboard also employs a blockchain ledger to improve multiple points of Hello Tractor’s business.

“We’re an agricultural technology company. Our platform connects farmers who need tractor services to tractor owners who own these assets as a business. We create that marketplace to bring supply and demand together,” said Oliver.

The demand stems from the 80 percent of Sub-Saharan Africa’s crops harvested without tractors or machinery and the 50 percent of the continent’s farmers who suffer post-harvest losses annually, according to IBM and the Food and Agricultural Organization.

IBM and Hello Tractor’s Digital Wallet will also loop in data from fleet owners regarding tractor use, track and predict repairs and servicing and build credit profiles to open bank financing for farmers.

Hello Tractor is a connecting service — neither the startup nor its farming clients own tractors. Founded in 2014, the venture began operations in Nigeria and has expanded into Kenya, Mozambique, Senegal, Tanzania and Bangladesh within the last year, according to its CEO. A for-profit entity, Hello Tractor has raised funding from private investors, DFI grants and a seed round.

The company currently generates revenue by selling the tractor-monitoring devices and software subscriptions for its app, according to Oliver. Hello Tractor doesn’t yet charge transactional fees for connecting tractors to farmers, “but we’ll be testing that next year,” he said.

The startup also plans to create broader revenue opportunities from data analytics.

“At this phase we focus primarily on mechanization, but coupling the insights being generated through that device with the IBM platform solutions specifically for agriculture can extend the value we offer our customers and…be monetized,” said Oliver.

He estimates the business of connecting small-scale farmers to tractors as a “multi-billion market” globally and pointed to Nigeria as the African nation with “the largest inventory of arable-uncultivated farmland,” 37 percent of the country, according to World Bank data.

IBM Research’s co-financing to build Digital Wallet does not include any equity stake in Hello Tractor, IBM confirmed.

The collaboration aligns with IBM’s global agricultural strategy, embedded largely in its Watson AI business platform and global agtech partnerships. As TechCrunch covered, IBM partnered with Kenyan agtech startup Twiga earlier this year to introduce to Twiga’s network of vendors a blockchain-enabled working capital platform.

IBM Research views the partnership “as scientific research collaboration,” according to VP Solomon Assefa.

“Through all its touch points — farmers, machinery, dealers, crop yields, data inputs — Hello Tractor is convening the whole agricultural ecosystem,” he said.

As discussed at Startup Battlefield Africa, Africa is shaping its own blockchain-focused startups and use cases — characterized more by utility than speculation. On the crypto-side, there were several 2018 ICOs, including remittance startup SurRemit’s $7 million token launch, payments venture Wala’s $1 million offering and one by South African solar energy startup Sun Exchange.

IBM Research and Hello Tractor teams will continue to build out the blockchain-enabled Digital Wallet on a lab, engineer and business level throughout 2019.

“We’re cultivating the partnership… including the executive and go-to-market side. You also have to focus on how you scale,” said Assefa.