This app is like the stock exchange market but for farming- here’s how it works

• As with a stock exchange market, you can buy produce such as macadamia trees and moringa and earn returns.  
• Fedgroup introduced impact farming in South Africa over three years ago, and now has about six assets that people can directly invest in.
• The latest is a lettuce stack grown hydroponically, but you’ll need to have R75,000 to buy in, given the product has high returns.
• For more stories, go to www.BusinessInsider.co.za.

More than three years ago, Fedgroup pioneered the debut of impact farming in South Africa with its app, allowing people to venture into alternative investments such as investing in fresh produce and renewable energy sources.

The concept is similar to the stock exchange market, but with farmed produce as the assets that investors can buy into. Investors can buy an asset directly on the app or a mix of them and watch them grow as skilled commercial farmers tend to the produce.

Speaking to Business Insider South Africa, CEO of Fedgroup, Grant Field, said the company wanted to create a simplified investment platform that potential investors could easily understand.

“We got 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,” said Field.

“If you think of an investor, a retail investor would typically invest in a fund, but very often, funds are investing in funds, and other funds are investing in funds. So often, people don’t even know; not even the funds know where their money is going,” he said.

He added that the Fedgroup model provides the benefit of “reducing all those layers” that exist in investing.

“So, when you come in to invest your money, you are investing directly into the asset that a farmer is looking after on your behalf. So we’re offering above normal returns because there’s no layer of fees,” he said.

Its first asset was solar panels that investors could buy and then let out to commercial firms. This allows investors to earn monthly returns based on the amount of energy their panel produces.

It later branched out to add more products on its app, including blueberry bushes, beehives, macadamia nut trees, and moringa, farmed on sustainable farms across the country. The crops are essentially cultivated on the investors’ behalf, and they earn an income from a portion of the sales made from the harvest.

“We offer what we call an internal rate of return, you essentially buy an asset, which at the end of the period is worth nothing; but the internal rate of return takes into account the fact that you get all your capital back, plus the return that we advertise,” Field said.

How the Blueberry asset works

The blueberry bush asset.

The blueberry bush asset.

The blueberry bush asset.

Each asset has a stipulated expected yield, and the returns are calculated based on the life cycle of the produce.

Fedgroup’s newest asset is vertical lettuce that is grown hydroponically. The stack, which promises a yield of 14% monthly, comprises 82 lettuces harvested every 21 days. Off-takers buy the lettuce, and a portion goes to the farmer.

A stack of lettuce will set you back R7,000, but investors must have at least R75,000 on the Fedgroup’s impact farming app platform.

Among its suite of assets, lettuce carries the highest returns, but, like any investment, diversification is critical, said Field.

“Last year, we had two Black Swan events where frost, a one in a hundred-year occurrence, affected a large portion of the blueberry farm. But we were able to recover and still pay out a return to our investors,” said Field.

The lowest investment you can make is R100 which can get you a moringa tree, but you must 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 established a unique queen-rearing programme, which is also one of the first in Southern Africa. Since going live with impact farming, Fedgroup has grown its swarm to approximately 102 million bees.

The company has ten new products in the pipeline, including an asset that can be farmed to produce recycled plastic, and allowing clients to invest and make a 0% return; “but they’ll get all the environmental returns, [because] we recognise that some people are not in there for a financial return.”

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