The country of Georgia is developing fast. With many young and creative English-speaking people, a friendly business climate and a favorable tax system, the country is gaining increasing attention of investors and sees a remarkable growth in the number of startups. However, the majority of the population (about 53%) is still working as smallholder farmers on small plots of land with a low productivity. For this reason two Dutch entrepreneurs decided to bring the worlds of agriculture technological development together with a new startup: Traktor
Last week Jonne Catshoek, Mark van Embden Andres and their team of Georgian programmers released Traktor. The application (online & mobile) puts together more than 70 instructional videos for Georgian farmers, containing explanations about modern practices by agricultural experts from all over the world. By now the videos have already been viewed over a 600,000 times, a significant amount for a country with a population of about 4,5 million people. Besides instructions the application also offers a crop calendar, which shows farmers when to do what to cultivate a particular crop.
“Despite farming being the most common occupation, we noticed that many farmers are still using outdated methods. We realized that with modern technology, we could help them to innovate. And if you can make a difference in this sector, it has a tremendous impact on the development of the country,” Mark, Chief Operating Officer, explains.
“Of course instruction videos are not the only important aspect. For farmers it is also a matter of having access to the right input supplies. That’s why we decided to include our own ordering service” CEO Jonne Catshoek adds.
By teaming up with programmers, business developers and the largest Georgian agricultural supplier, the startup has integrated an online shop that allows farmers to buy world class seeds for reasonable prices. This step offered several challenges. First of all there was the technical challenge of building an e-commerce platform for agricultural products that would be available for all mobile users. But as soon as the online shop was developed, the startup faced an even bigger challenge: the challenge of how to sell their product to farmers who have never bought products online or who are often not even present on the internet.
Out of the box
“We fully realized that we had to be reasonable in our expectations; that it would be important to focus on the long-term”, Mark mentions. “However, we also understood that in emerging markets like Georgia you have to think out of the box and be innovative. If farmers spend limited time on the internet, we have to bring them to the internet. That’s why we decided to cooperate with the largest telecom company in Georgia. When farmers now become a member of Traktor, this company will allow them to buy modern smartphones with a data bundle for a monthly payment of just $3 a month.”
Building a sustainable business
At the moment Traktor is dependent on investments from non-profit organizations (People in Need, NL MFA, the EU and USAID), which help the startup to establish itself as a credible organization. “We strive to achieve full commercial viability though. We will soon approach investors for private equity to support international expansion into larger emerging markets in the region,” Jonne describes.
“Georgia is a relatively small market, with people that are very open to trying new things. It is good place for startups to flourish. This is also evidenced by the fact that we now already work with the largest retail bank, the largest telecom operator and the largest supplier of agricultural products,” Mark adds. “Such initiatives also have a much stronger developmental impact. During my professional career I saw a lot of development initiatives with the right intentions, but which were not done in an economic and commercially viable way. With Traktor we try to go beyond this.”
This contribution was written by Maarten de Boer.