‘Uber for tractor’ startup – Hello Tractor recently entered into a partnership with American machinery manufacturer, John Deere. The partnership will see 10,000 tractors deployed across Nigeria.
“[We] recently embarked on an exciting new public-private partnership with John Deere and the Nigerian Federal Ministry of Agriculture and Rural Development to deploy 10,000 tractors over the next five years,” Jehiel Oliver, the founder and CEO of Hello Tractor, said in an interview with Forbes.
“The government will implement a pay-as-you-go model that allows tractors to be leased to new owners over a defined period of time, before being resold to them at a discount.”
Hello Tractor connects farmers to tractor owners. It will thus focus on the implementation part using its technology. “Hello Tractor will serve as an implementation partner, providing tractor monitoring, security, and valuation support,” Oliver said.
Recently, Hello Tractor also entered into a technology partnership with the US. based CalAmp as well as India-based Aeris. This particular partnership would see CalAmp – through Hello Tractor – “equip [the] John Deere tractors with intelligent telematics and wireless connectivity.”
” CalAmp, a technology solutions pioneer transforming the global connected economy, announced that it is partnering with Hello Tractor and Aeris to equip John Deere tractors with intelligent telematics and wireless connectivity,” wrote CalAmp in a press release.
“The partnership and [the] combined integrated Internet of Things (IoT) technologies create an “Uber for tractors” that enables an on-demand mechanized equipment service for small farmers in Nigeria and other developing areas to improve economic advancement.”
The public-private partnership between Hello Tractor, John Deere, and the Nigerian government has particular deliverables. Yet, CalAmp also believes that their technology partnership will enhance this.
The end goal of the partnership is to see that more land is put into production which in the end should create more jobs.
“The partnership creates a technology-sharing ecosystem that promotes economic growth by putting more land into production and creating jobs across the region,” reads part of the press release.
When the 10,000 tractors are deployed, it is anticipated that 9 million hectares of land will be put into production. Additionally, 37 million metric tons of additional food will be produced and more jobs created.
“More than 2 million direct and indirect jobs [will be created] in Nigeria – all powered by Hello Tractor, CalAmp and Aeris technologies,” reads part of the press release.
Founded in 2014, Hello Tractor started out as both a software and hardware company.
The company was making three-wheeler tractors that were equipped with its GPS and IoT technology. These it was planning to sell to farmers on loan and each cost $3,500. “It’s raised $2 million for this and struck a deal with Nigeria’s central bank, which is guaranteeing 75% of the amount,” wrote Fast Company in 2015.
However, Hello Tractor abandoned this model according to Oliver’s interview with Forbes.
“When Hello Tractor launched in 2014, our flagship product was an affordable, ultra-low horsepower, two-wheel tractor fitted with our monitoring technology,” he said.
“We sold these to enterprising farmers or cooperatives, who then accessed our tractor-sharing platform to identify and service additional demand from smallholders. Great in theory? Yes. Great in practice? Not at that time.”
Oliver says that they moved away from the model after the Nigerian economy weakened due to the recession a year later.
“Credit markets dried up and depreciation of the local currency effectively doubled the price of our tractors, making it impossible for our customers to finance purchases.”
Before, Hello Tractor was manufacturing their tractors from China and had plans to move the manufacturing to Nigeria. Yet, all this was shelved.
“Perhaps, more importantly, we realized that to make it financially attractive for tractor owners to use our platform, the tractors themselves would need to be able to reach more farmers over a wider distance than was feasible for our existing product.”
In January 2017, they finally made the ‘strategic’ decision to focus more on the app than on the tractors.
Olivier says that this has “proved a more effective model” enabling them to capture “75% of private commercial tractor inflows to Nigeria, expand to five markets across Africa through strategic partnerships, and touch the lives of 250,000 farmers.”
When you look at it from the point of scalability as well as eliminating overheads, then the partnership with John Deere makes sense.
Hello Tractor and John Deere have been talking from as far as 2015 though. And according to the Washington Post, Hello Tractor might launch the same initiative in Kenya.
Currently, Oliver – a 2015 Echoing Green fellow, is based in Abuja, Nigeria though part of his team is based in the USA.