66. Jehiel Oliver: Tractor-as-a-service

Tech enabled two-sided marketplace in Africa

Hi. If you are new here, I am Rhishi Pethe, and I am excited you’re in the “Software is Feeding the World'' community. Every Sunday, you will receive this free newsletter at the intersection of technology and agriculture systems. I am a product manager at Project Mineral (focused on sustainable agriculture) at X, the moonshot factory. The views expressed in this newsletter are my personal opinions.

This week’s “Conversation with Rhishi” features Jehiel Oliver, CEO of Hello Tractor. His company provides tractor-as-a-service to farmers who don’t own tractors in many African countries.

Jehiel has received numerous awards for his work in social entrepreneurship including being recognized by Foreign Policy Magazine as a Top 100 Global Thinker for 2016. He was appointed under the Obama Administration as a member of the President’s Advisory Council on Doing Business in Africa, where he chaired the technology subcommittee.

What is Hello Tractor?

Hello Tractor is a marketplace company started by Jehiel Oliver in Africa. The premise of Hello Tractor is straightforward. A majority of farmers in Africa farm small amounts of land, between 1-2 acres. (For reference, the average farm size in the United States is 444 acres.)

Most of the farmers plow their land using animals or by hand, as they do not have the resources to buy a tractor. The rate of mechanization (% of fields which are farmed using a tractor) is less than 50% in Africa. If you are going to farm 1-2 acres, buying a tractor does not make economic sense, as the tractor will be lying idle more than 95% of the time.

Hello Tractor started out with the hypothesis that if they could provide peace of mind to tractor owners around the security, proper usage of their tractor, tractor owners would be willing to rent out their tractors. 

To do this, Hello Tractor has created a device which can be attached to a tractor. The device is connected to the cloud and provides operating details like location of the tractor, operational hours, fuel levels to the tractor owner in real time. It protects the tractor asset and reduces fraud. With complete visibility to their tractor status, tractor owners are able to rent their tractor to other farmers for a price. Hello Tractor helps connect tractor owners, who want to rent out their tractor, with farmers who want to rent a tractor for their farm. You can think of it as Uber for tractors, though that is not a perfect description for what Hello Tractor provides.

In the smallholder1 space, farmers face challenges to access working capital to buy seeds, fertilizers, herbicides, and other inputs needed to farm. Given the dire needs for financing, farmers will always take up financing, if it is offered at reasonable terms to buy seed, fertilizers etc. If one starts with financing, it becomes difficult to prove your product/value hypothesis. Farmers will always take up good financing, over a pure product offering. This can confound the value of your product/offering with the value of accessing financing by farmers.

Our conversation touched on the difficulty of proving a non-financing-based value hypothesis in the smallholder space and the customer acquisition strategy for tractor owners and tractor renters. Given the small size of the farms, low horsepower tractors are ideal in Africa. Jehiel is excited about a convergence of small, low-power electric tractors powered by the sun. These tractors will not be dependent on energy grids, which can be unreliable or unavailable in certain parts of Africa.

Women are a big part of agriculture. As part of Hello Tractor’s social impact mission, we touched on the role of women in agriculture. Jehiel ended the conversation by talking about the women who are an inspiration for him.

I hope you enjoy the conversation.

Proving a hypothesis in emerging markets

Rhishi Pethe: In the developing world, agtech entrepreneurs typically start with finance for inputs like seed or chemicals, or a connection with the commodity buyer2 to buy their output. You went in a different direction.

Jehiel Oliver: Farmers across emerging markets, specifically Africa, under-cultivate their land. They lose income because they don't have access to equipment. Most farmers cannot afford to own their own tractor, nor should they, as the plot sizes are so small. The unit economics of a tractor delivery service are more attractive from a cost, time, labor, and efficiency perspective. It (unit economics of tractor delivery service) is a great opportunity to introduce a collaborative consumption model for tractors.

There are different agro-ecological zones3 with unique planting behaviors in different parts of each country. The timing of planting and harvest activities is different in different agro-ecological zones. Hello Tractor can optimize across zones by planning routes.

Agro Ecological Zones in Nigeria (rom Agriculture Nigeria)

The challenge in emerging markets is that, if you lead with finance, you will sell products because people will buy with financing. But if you want to prove a hypothesis, financing might taint product discovery work. Am I really adding value, or am I selling capital into a market that is capital constrained? We wanted to prove our hypothesis on tractor rental first.

Rhishi Pethe: Why are there no cooperatives providing tractor rentals or a service to plant using the co-op’s equipment? For example, here in the US, if you are a large farm, you call your agri-retailer, and they will come and spray chemicals. They maintain a fleet of equipment and provide services to farmers.

Jehiel Oliver: There's a few different layers to why it doesn't work in Africa — capital and tech. The most effective equipment for contract is a low-horsepower tractor. It is disconnected from the cloud. There's no visibility around that equipment, no remote tracking and remote management. It is difficult to serve farmers distributed across far distances with small, fragmented plots and manage fraud.

There's no incentive for an individual or a group to invest capital in equipment without the ability to protect the equipment. The vast majority of our customers live in markets like Nairobi or Dar-e-Salaam. They make passive income on the side from their two or three tractors. Our IoT tech to track tractors solves an immediate problem of tracking. It allowed us to build the supply side of our two-sided marketplace.

There is a lack of volume on the supply side. We provide technology to people who invest in expensive equipment. It helps us build our supply side quickly with minimal spend and use our marketplace to optimize the supply as an add-on feature.

[American entrepreneur and investor] Chris Dixon said, “Come for the tool, stay for the network.” It is a clever way to describe our business strategies.

Innovation and Disruption

Rhishi Pethe: Last year, a VC wrote that agtech has focused on solving problems in the developed world. Due to this, agtech has made only marginal improvements.

Jehiel Oliver: There hasn't been much capital flowing into agtech in emerging markets. There's a lot of misunderstood risks, and it scares away cash.

From 2021 Agfunder Global Report. Agrifood tech investment in Africa has been negligible. Not a single African country is present in the list of top 20 countries by investment.

We don't have a bunch of people nipping at our heels who are better capitalized and who hire up all the talent. It keeps the team focused on what matters most: key customer needs.

I do question the idea of scaling a business too fast. In agriculture, the cycles are longer. The customer sensitivity is higher. There's no room for failure because you're playing with livelihoods.

Emerging market agriculture comes with other issues that might prevent rapid scale. The infrastructure sometimes doesn't exist in our markets. Can you predictably take a pool of capital and scale your business across two or three key features that solve real problems, without controlling for all these other gaps in the market?

Innovation helps around the edges. Everybody's not going to be a Google, an Amazon, or an Apple. Most people innovate around core technologies [transportation infrastructure, banking, reliable internet connectivity etc.] that have already been proven. In African agriculture, the core technologies don’t exist. In African markets, do you want to build something marginally valuable, or do you want to build core technologies? If you can't get Cargill in Africa, what innovation is  going to compete with the value that could be created through building a functional trading company? 

Rhishi Pethe: That is a profound statement. It's very easy for people to look at the next shiny object.

Jehiel Oliver: These markets are capital-deficient. If a farmer can get a loan to buy improved seed or fertilizer, or to purchase mechanization services, it will improve their yields by 50%.  The improvement in yield will be more than the cost of capital on their loan. Most people will not believe it. And of course things are tricky. There has to be a fuller appreciation for the existing fundamental gaps and how we as entrepreneurs can solve those problems, while still looking for opportunities to be better than the status quo through innovation. The lack of mechanization, lack of formal banking structures, are some of the fundamental gaps today.

Two-sided marketplace: farmers and equipment owners

Rhishi Pethe: Could you talk about your customer acquisition strategy for farmers who want to rent a tractor?

Jehiel Oliver: On the farmer side (demand side) our customer acquisition strategy is a convergence of farmers and rural folks increasingly using mobile devices, and the penetration of tools like Facebook.

We monitor the supply side of our business, using tractor activity and inactivity as a signal. We can use marketing channels like Facebook to say, “Look, there's a tractor nearby.”

We can engage that individual directly as a farmer, but more often than not, [we use] a booking agent. It is someone who's a little entrepreneurial, who's looking to make some money, by booking services on behalf of farmers in their community. 

When we first started the marketplace, many farmers weren't using smartphones at scale, and they still aren't. In North America, most growers access technology through their agronomists or their crop dealer. They bring in a flash drive to pop into the system to understand what’s happening with the John Deere tractor.

Image from HelloTractor.com

When you compare what happens in the US versus in Africa, we [people in the US] rely on things like capital banking infrastructure, roads, and connectivity. There is human infrastructure as well. Most farmers leverage experts to understand and access technology infrastructure that doesn't currently exist in our markets. We're building it as we grow our business. The agents represent our technology across the last mile, and perform a multitude of functions.

[In Africa], I can assist in aggregation of demand. I can make sure that the field has been properly cleared and is ready for mechanization. I can make sure that payments are streamlined, and if a tractor deploys their equipment, they will be paid. I can make sure the field is roadway accessible.

Imagine a world where a road can exist during the dry season, but when the rainy season happens, some of the networks get washed away and are no longer accessible. An agent who's community-based can have those insights. The last piece that's interesting is leveraging that social capital. That's so necessary in agriculture, whether it is a farmer in Indonesia or Iowa. We tap into existing social networks with our agent network. And we use that as a channel to deliver our solution. 

Rhishi Pethe: Trust is so critical. It's the same story everywhere. What is your customer acquisition strategy on the supply side?

Jehiel Oliver: It is traditional B2B enterprise sales. The mechanics of channel management, like working up the supply chain with dealers and the OEMs (Original Equipment Manufacturers like John Deere)  aggregate your customer base through that channel. 

We use our brand footprint to bring traffic in our direct sales market. A large portion of our traffic is when they see what we have to offer, and they feel that we are solving their problems. We protect their assets, and reduce fraud and fuel theft, underreporting, etc.

Rhishi Pethe: What's the economic case Hello Tractor makes to the farmer?

Jehiel Oliver: We're 40 times faster than manual labor. It's a third of the cost. That's true across most of the economies that we work in. You lose about 1.5% of expected yield, for every day you plant late. Getting the crop established and running is mission-critical.

That is why a lot of the equipment sharing happens further down the production cycle in North America, because farmers can afford to own their own equipment. They'll contract out things like their boom sprayers, because it's less time-sensitive. Most of our farmers don't have access to equipment.

55% of our customers receive tractor service for the first time in their life through Hello Tractor.

It speaks to the need in the market. It speaks to our ability to reach a reasonable population.Most (93%) of our customers report higher yields and income. Single-digit farmers in our platform aren't living below poverty level. 5% of the remaining farmers are low-income small farmers, not subsistence farmers. They aren't doing well because they don't have access to the equipment or other inputs or capital to grow their operation.

55% of folks we're servicing, if it were not for us, would be out there with a hand tool, losing a ton of money. They pull kids out of school to make sure their season is a success.

A beautiful convergence

Rhishi Pethe: Where do you see the trend going in the OEM space? Do you think emerging markets will see consolidation and bigger equipment? Do you think with electrification and autonomy, one could swarm their field with smaller tractors?

Jehiel Oliver: As much as I love autonomy, the value proposition is diluted because the cost of labor in our market is so low right now. In-field autonomy is interesting, if you can get a low-trained, low-skill person to perform in a field.

However, there is a beautiful convergence of rural electrification and off-grid (mostly solar) clean energy. It's the most beautiful, complementary trend imaginable for mechanization with the emergence of off-grid infrastructure. A lot that needs to be figured out, but the tech and battery storage is good enough.

Compact tractors are the most cost-effective, highest-ROI investment in mechanization for smallholders, because you're jumping from plot to plot. For large horsepower equipment, the opportunity cost is high, any time the equipment is not doing a farming activity (for example, when it is on the road driving between fields.) The 75 horsepower tractor is the sweet spot for somebody who's servicing farmers between one to five hectares. And that's where tractor electrification is progressing. The fastest rate is that lower-horsepower segment.

Monarch has roughly 70 horsepower equivalent power tractors. Escorts are lower by about half. You can't do some of the more destructive operations with a 35 horsepower tractor. You can pull a seed-drill, and you can start to introduce minimal tillage or no tillage.

Now growers who do not have access to mechanization can get an electric zero carbon footprint tractor powered by the sun, and the sun is in abundance in Africa. It is better for long-term soil health, and to keep soil structures in place for the longer-term success of the individual farmer.

It's a leapfrog opportunity for us to not only innovate to the status quo, but also be better than the more advanced agricultural economies. 

About 2 million low-horsepower tractors are sold in the world a year. Hello Tractor was the first to connect these tractors to the cloud and build technology specifically for the buyer.

The connected-to-the-cloud-tractor needs to earn more by efficiently connecting with farmers, particularly those that exist outside of their community. We were the first to market to build technology to track tractors in the smallholder space for contractors and to support their unique needs. OEMs are good at supporting farmers. We don’t pretend to be there.

Rhishi Pethe: That's a key insight. You started to connect the buyers with the dealers, the OEMs, and brought in banks for financing. Do you plan to connect the farmer with input providers or commodity buyers?

Jehiel Oliver: For tractor finance, we partner with people who have liquidity, who are chasing yield to invest in this new asset class. But we're not going to build up a balance sheet.

Our product that helps you minimize your risk exposure as you invest in this asset class. It is a pay-as-you-go system. You can see the performance of the asset. It is an asset being financed to borrowers with a full book of business from our marketplace.We track what the borrower was doing with the tractor. Everytime they service a field, they have to pay a small amount to pay down the loan.

The rate of amortization is greater than the depreciation rate, and so you're protecting the collateral value. If there is a default, the investor is never underwater. We resell it in the secondary market, recoup the principal, and pay off the investment. 

We are not trying to be a bank. We're not trying to displace commercial banks. We are saying that we understand something unique about this market that can complement your portfolio. 

Africa and the US relationship

Rhishi Pethe: You served as a member of President Obama's advisory council for Africa. What surprised you most, as part of that work?

Jehiel Oliver: I was most surprised by a universal lack of understanding and appreciation for the opportunities and real challenges that exist in Africa, across both public and private sectors.

We are now starting to shift to a more robust, strategic approach to how we engage with the continent, both government-to-government as well as the private sector, to accelerate development. From a geopolitical perspective, it'll be hugely beneficial to the United States and our allies’ interests.

I'll give you some examples that are personal and infuriating. We would talk about “capacity-building.” I hate the term, as it is paternalistic. People have intelligence in their own capacity. We just said, “They don't know what I know, they must need my help.”

Our head of digital got invited to MIT to speak. They denied her H1B visa to speak at MIT because they deemed her a risk of overstay. She's smart, she's educated, she loves Nigeria, which is where she's from. She has no interest in staying in the US. It was laughable. It was infuriating. There are so many examples, where people can't come here, share their knowledge, and take knowledge with them. 

There's an even exchange of knowledge when we engage culturally and geographically. We have bureaucratic systems that, as much as we complain, are resilient and work generally.

And that's something that we can share with a younger democracy. There's a lot that can be learned from these democracies around how to engage with civil society in a way that ensures buy-in, and the necessary transparency and appreciation for policy.

It is not just the technical knowledge, but also things people in politics care about — the export of democracy and the US soft power. You miss out on opportunities when you tell people they can't come.

Women and agriculture

Rhishi Pethe: I'm interested in the role women play in different parts of the economy and agriculture. It's tragic where women do so much work, but don’t get enough credit. Can you talk about it, in your context?

Jehiel Oliver: In Africa, 70% of people work in agriculture or agro industries. Somewhere between 60-70% of the ag labor force is women. For us, the statistics increase even further because we work in basic pyramid populations, where marginalization of women tends to be higher.

I'll give you an example of tractor finance. It's generally unheard of for women to get a loan for a tractor, especially across our unbanked customer base. We work with Moody's on a credit underwriting system to weigh a variety of factors, including gender, but not in a crude way. When I was working in micro-finance, it showed the real economic benefit to working with women, applying a gender lens to the business.

We're using actual products and data driven approaches to create access. It is going to meet the impact objective, but also helps us commercially. Women will be overwhelmingly our customers in the future. From a risk management perspective, financing a tractor for somebody who does not have access otherwise will always yield a better outcome, which seems counterintuitive.

Source: Palacios-Lopez A, Christiaensen L, Kilic T. How much of the labor in African agriculture is provided by women?. Food Policy. 2017;67:52-63. doi:10.1016/j.foodpol.2016.09.017

When people have more access, they can start to misbehave because of their own incentive. They weren't doing anything wrong, but they were taking out loans to pay off other loans and over-leveraging. (Case of Andhra Pradesh debt crisis in India from 2010) But women tractor owners in our markets are very responsive. They take care of the equipment, as it is a lifeline. If we can tap into it to create opportunities, we can grow our business and be more profitable on a risk-adjusted basis, as you're dealing with a lower-risk customer. 

Rhishi Pethe: A lot of the work that you do is extremely inspirational. I'm curious, who do you look to for inspiration?

Jehiel Oliver: I'm a family guy. My wife and my mom genuinely inspire me because of their inherent goodness. I've been fortunate to have been guided by doing what's right vs. what can benefit you in the short term. I'm  speaking about my mom and my wife in particular. When you have your compass set to try to do the right thing, you go to bed knowing you genuinely tried.

Conversation Notes

Introduction to HelloTractor featuring Jehiel Oliver

Meet a tractor that can plow fields and talk to the cloud. NPR report from March 2016

Global fund for women: Empowering women through sustainable agriculture

Jehiel’s interview with Rural 21, The International Journal for Rural Development “You have to listen to your customer

Working paper 189: Daum, Thomas & Birner, Regina. (2019). African Agricultural Mechanization: Myths, Realities and an Emerging Research Agenda. SSRN Electronic Journal. 10.2139/ssrn.3500690. 

Chris Dixon: Come for the tool, stay for the network (May 2015)

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A smallholding or smallholder is a small farm operating under a small-scale agriculture model


A commodity buyer is an entity that buys farm output like grains. Cargill is a prime example of a commodity buyer.


Agro-ecological zones (AEZs) are geographical areas exhibiting similar climatic conditions that determine their ability to support rain-fed agriculture. At a regional scale, AEZs are influenced by latitude, elevation, and temperature, as well as seasonality, and rainfall amounts and distribution during the growing season.