Agric and tech sectors must come with allocations towards skills…
Jetstream Africa is a data-driven supply chain platform that is lowering the cost of cross-border trade in agricultural products. The tech company works with farm cooperatives and food processors in Africa to take the headache out of managing cross-border trade logistics. The products that they currently move across borders include food & cosmetics ingredients like shea butter – an ancient African extract from shea nuts that has seen increasing demand from companies in Western Europe, Japan and North America.
By choosing to focus on lowering distribution costs involved in cross-border trade, they are making it easier for smallholder farmers and SME processors on the continent to diversify their markets and access foreign exchange revenue.
Miishe Addy, founder and CEO at Jetstream Africa was a panelist on the agricultural panel at AB2020’s recent annual Tech in Ghana Accra event where she spoke extensively on the collaboration opportunities present in the ecosystem. In her view, the most critical success factors in supply chain are cost, trust and reliability.
Here, we speak exclusively to her about how they are achieving those success factors through their platform.
Congratulations on your recent graduation from the respected Washington DC PeaceTech Accelerator program. As cohort number five,your company was one out of four African startups, and the only one in the logistics service industry that were selected into the competitive program. How did Jetstream come about?
Supply chain sounds like a boring topic, but it’s not! Bottlenecks in the distribution of agricultural products have had – and will continue to have – a big impact on how people live and work on the continent. Jetstream started as a logistics company for cosmetics manufacturers in South Africa. We consolidated airfreight shipments of finished shea and other products and sent them to the United States for distribution. We quickly realised that the biggest problems in distribution were happening further up in the supply chain, in places like Northern and Eastern Ghana, where millions of smallholder farmers and SME processors are producing ingredients that make their way through long and complex supply chains to markets like the US, South Africa and Europe.
Why is it important to you as a company to solve challenges in the agricultural supply chain industry?
About 60-80% of the wholesale value of a finished product made from African agriculture is eaten up by “off the farm” distribution costs. That includes commissions to middlemen, storage costs, transport fees, overhead, etc. Some of these costs are justified, but a lot are inefficiencies that have accumulated over generations to address the fragmented, undercapitalized nature of supply chains in Africa. The result is that the share of income that African suppliers – whether they are farmers or processors – keep from their products is pressed down to make room for lots of other players in the supply chain.
Specifically, for certain products like shea, women’s cooperatives have scaled up in response to international demand only to find that they get inconsistent bulk orders from buyers each season. Their immediate pain point is unreliable market access. But if you scratch the surface, you see huge transport costs, distribution delays, and stock-outs increasing the friction that buyers face when they place bulk orders with some of these cooperatives. That’s not sustainable for buyers, so it becomes a problem for suppliers.
On one of my projects for a development NGO, we got a grant from a global donor to teach farmers a course in ‘Farming as a Business’. Since then, I’ve come to believe that folks like the donor can make a bigger impact by investing in solutions to problems that are embedded in the systems in which farmers operate. The complex and costly agricultural supply chain in Africa is one of those problems. In the end, “Farming as a Business” courses only make sense in the context of a functional ecosystem where smallholder farm-businesses can be profitable.
Over the long term, the high costs of agriculture on the continent encourage suppliers to sell their farms and factories to bigger companies, often from outside of Africa, that are just better capitalised and better positioned to benefit from long-term value creation in African agriculture. At 38, I’m too old to be coy about this sort of thing — I think that’s a problem. I think the question of “who owns what?” is an important one for Africa, especially as we see more vertically integrated supply chains, where big companies are looking to acquire farmland and factories here on the continent. Ten years from now, we will see the dividends of agricultural value creation accrue to the people who own the farms and the factories. There’s a big opportunity now to make sure that smallholder farmers and SME processors are part of that picture.
Can you please delve deep into what your technology can do?
Jetstream’s supply chain platform lowers the costs of distribution by consolidating smaller orders into scheduled bulk shipments with transport providers. We’re building volume along specific trade lanes, aiming to do repeat business with the same logistics providers and customs agents in order to drive efficiency. Through consolidation, Jetstream makes it possible for smaller suppliers to benefit from economies of scale usually only available to large corporations.
To increase trust, Jetstream’s platform uses an algorithm that prevents double-booking in order scheduling as well as a tracking system that reports out to suppliers, and their trading partners, exactly where orders are in the supply chain. The innovation here is in how our system is designed and implemented for fragmented, low-tech environments in Africa. Incidentally, offering buyers farm-to-door traceability has been a great opportunity for partnership with other companies here in Ghana, including our logistics partners. We are happy to see the ecosystem grow as we grow.
How has Jetstream been funded so far?
We successfully raised a pre-seed round from Hustle Fund in San Francisco and C5 Capital in London, through the PeaceTech accelerator. We’ll be opening our seed round next year, look out for announcements on that.
Who else is a part of the team at Jetstream?
We have our logistics pro Solomon Torgbor, who has worked with a Maersk subsidiary for about 7 years; our resident foodie and product design lead Raquel Wilson, who has worked with the UN in addition to co-founding a popular farmer’s market in Senegal; our CTO Clement Udensi who co-founded a last mile delivery startup in Accra and Lagos; and front-end developer Simeon Babalola who is a fresh graduate of MEST Africa.
Which countries are you currently operating in?
We are currently applying our technology to supply chains in Ghana, and will be expanding to other countries in West Africa in the foreseeable future. Because our technology makes its biggest impact in resolving inefficiencies that arise between the farm and the port, we can sell anywhere once a shipment gets to the port. Today, most of our distribution pipeline is in the US, UK and Asia.
So, how do you make your money?
We charge a fee for the use of our software that is based on shipment volume.
What have been some of your memorable highlights this year as a company, and what comes next in 2019?
Living together as a team as we built and launched our minimum viable product in Accra was an awesome experience. The impact of physical presence in helping teams grow and build together is underrated these days! Overall, in 2018, we proved our concept with revenue and early adopters who helped us understand where the gaps in the market are. 2019 is all about growth. Iterating to grow our base of suppliers, while maintaining high standards of quality and service is our priority for next year. Beyond that, we look forward to expanding our trade lanes and geographical reach.
What’s your 10-year vision for Jetstream Africa?
About a month ago, an SME business owner in Kenya contacted Jetstream asking to buy a certain type of dried yam flour from Ghana. That crop is not in our supply chain yet, and we do not yet have a cost-effective trade lane from Ghana to Kenya for SME orders. So she agreed to join our waiting list. My 10-year vision for Jetstream Africa is to not have such a waiting list. In 10 years, we’ll be able to move whichever agricultural product to whichever enterprise that needs it, especially within Africa.
We’re pushing toward this vision by using our own data about trade flows and supply chain costs, as well as operational efficiencies in how we (through our logistics partners) move agriculture through the chain, so that farmers and food companies can focus on what they do best — growing food and marketing it to consumers.
Finish this sentence, in 2020 Africa will be…
…a model for global agricultural development.
Visit Jetstream Africa
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