Hectare

Idea

Introduction

Hectare is a leading online agricultural marketplace provider in the UK. We’re disrupting outdated traditional trading processes that haven’t evolved into the digital era, and simplifying the way farmers do business in the process. We operate two online platforms, SellMyLivestock and Graindex. Our mission is to make farmers’ lives easier.

Intended impact

Trading livestock and grain in the UK traditionally takes place through inefficient labour and capital-intensive processes. We have estimated that traditional method transaction costs are between 5-12% of the total sales value. When 46% of UK farmers are not making a profit from the sale of their key outputs and their business is not secure for the future (based on our own data), this is clearly unsustainable.

Our platforms mean farmers can trade directly with other farmers or large corporate buyers in a way that's simple, transparent and secure.

Our platforms result in:

Supply chain efficiencies which we have estimated at 5-12% on the bottom line.

Matching of buyers and sellers which drives liquidity and efficiency.

Likely improved animal welfare and biosecurity by reducing stressful journeys and risk of contact with potentially diseased animals.

Access to products like finance, haulage, and insurance.

Improved provenance and data as goods can be digitally tracked and cross-referenced with various government and industry databases.

Substantial accomplishments to date

Leading UK digital marketplace for livestock and combinable crops. Jointly these sectors have an estimated £15bn/year transaction value.

We deliver a compelling value-added proposition to UK farmers by reducing transaction costs by up to 90% (based on our own estimates).

Now over 57,000 users (38% of all UK farms). User base is growing at a rate of over 2,000 users/month in 2019.

Launched in Ireland, with over £7.5m in traded stock in the first 7m of 2019, making up over 12% of our business already.

Seller retention (YoY) has increased from 28% in 2016 to 50.4% in 2018.

£85.6m of stock has been traded through our platforms in the last 12m, growing at +103%. We've delivered over £74m of traded value in 2019 YTD.

New clients including Cefetra and COFCO on Graindex, while in the livestock sector, key breed societies have dedicated areas.

Recently signed an MoU with a major auction mart business to help digitise their trading.

Our Valentine’s Day campaign, Tudder (aka Tinder for Cows) generated nearly 1,000 pieces of global media coverage and was seen by over 1.2bn people worldwide.

We've also been regularly featured in the media in the last 6m, including Farmers Weekly, BBC News, Sky News, and The Times.

Monetisation strategy

From the very beginning, we've known the importance of driving liquidity on our platforms by delivering a free basic service. We've now established a solid base and believe we are in a position to begin to monetise via value-added services.

We have developed a clear business plan that we are planning will deliver over the next five years:

0.5m farm users.
Across 6 countries.
20% market share of target markets.

We know that to deliver revenue we need to be in the middle of the entire, fully digitised buying process. So we’re now implementing a series of new value-adding products that will enable this 100% online trade on both SML and Graindex. These include Finance, Escrow, Insurances, Haulage, and a Vet Check service to get a trusted third party audit on livestock within 48 hours.

We've also launched a subscription service and will be developing data products in future on the back of the wealth of live pricing and trading data we are now generating.

Use of proceeds

This round of investment will go into three things:

1. Product development:

We have a pipeline of new products that will further drive online trading on both sides of the business. This includes finishing livestock and grain finance, livestock insurance, hybrid online/physical auctions and a tool to find the perfect breeding match for your livestock. Constant improvement of existing products is also key to our business model.

2. Marketing:

Promoting new products and revenue streams will take up 30% of the investment from this round, with creative campaigns planned throughout 2020.

3. People:

We have identified four senior hires and three managerial hires to continue to drive our user growth and monetisation, as well as to get ourselves ready for international expansion.

We have no debt, a low-cost head office an hour south of London, and a lean start-up mentality when it comes to spending company money.