Start-up snapshot: Bringing Kenya’s livestock industry into the 21st century

Mifugo Trade 600 x 300
Start-up: Mifugo.Trade

Taylor Tully is founder and CEO of Mifugo.Trade, a Kenya-based start-up that operates an online livestock exchange connecting producers and buyers. Livestock is a crucial industry in Kenya and supports millions of households.

The Mifugo.Trade platform seeks to increase efficiency and transparency in the supply chain, allowing producers to market their livestock at reduced costs and sell at higher prices by eliminating middlemen. Prior to starting the company, the US-born entrepreneur worked with pastoralists to prevent overgrazing and desertification by providing them training and resources to implement sustainable grazing methods.

Tully tells How we made it in Africa about his plan to transform livestock trading in Kenya, and the untapped opportunities in the industry. Below are edited excerpts.

1. Give us your elevator pitch.

Mifugo.Trade is working to transform the livestock supply chain by directly connecting livestock producers with buyers. We are trying to follow a global trend of digital marketplaces disrupting established sectors, from taxis to hotels. The livestock sector in Kenya is one of the fastest growing, representing 12% of national GDP. In 2014 about 2.8 million cattle were sold and slaughtered, and we expect those numbers to grow. But at the moment the sector is highly fragmented and dominated by small-scale middlemen. A cow on its way to Nairobi will typically change hands about three to five times before it reaches there – and as a result producers receive very low prices for their livestock.

So we have built a mobile-enabled website that directly connects livestock producers and buyers. We employ livestock assessing agents who upload pictures and videos of livestock onto the Mifugo.Trade platform along with data such as weight, age and sex. Buyers can view them on the platform and place bids online, or with a representative. We oversee the entire transaction, and help to arrange transportation and transfer of funds.

For all livestock sales facilitated through the platform we take a 4.5% commission. Our platform offers a number of advantages from direct access to buyers, to competitive bidding and transparency. Our launch customer is the Mara North Conservancy, which has over 2,000 members. Through our auctions producers can receive prices 20% higher than the local market. We have partnered with the Keekonyokie Slaughter House in Kajiado County, which is the third largest private slaughterhouse in Kenya. Our vision is to take this exchange to the whole of Kenya.

2. How did you finance your start-up?

We are currently self-funded, but also looking for investors and grant making organisations who may want to help us build out our model and bring it nationwide.

3. If you were given $1m to invest in your company now, where would it go?

We will improve our online platform, add some functionality and make it more user-friendly. Right now we operate in one local market but would like to expand to other markets in southern and northern Kenya. So an investment of $1m would help us accelerate the expansion. We would also expand to other services. Right now we are focused on cattle, but would like to get into goats and sheep, as well as transportation and logistics, which is also a major gap in the livestock sector. There is a really huge opportunity with livestock, and right now there is an underinvestment in the sector. We want to transform this space, and show what an exciting market it is.

4. What risks does your business face?

We are trying to transform the livestock supply chain and bring it into the 21st century. As our model is a different way of trading livestock, it requires some behaviour change. People we work with notice the value in what we are doing, but to get them to take the first step of doing things differently takes time. So right now we have got great traction with our primary users, but it is going to be slow progress in terms of fundamentally transforming this industry.

5. What has been your biggest mistake, and what have you learnt from it?

As a start-up and entrepreneur you are constantly experimenting and learning from your mistakes. It’s part of the process. Fortunately, we haven’t encountered any major setbacks, just a series of small learning opportunities, particularly with the building of the platform. When designing a product you must always keep your customer at the forefront of your mind, and how they might use it.

6. Describe your most exciting entrepreneurial moment.

It would have to be the eureka moment when the Mara North Conservancy approached us to help improve their market access. We started thinking about how to do things better than what existed, and the idea of an online livestock exchange hit us. It was exciting to figure out a way to dramatically increase market access for producers and increase their incomes. Working on the idea to its present improved stage has been exciting.