South African startup Livestock Wealth lets you buy a pregnant cow for about $1,000/380K Naira online and track the your new investment’s progress until birth. The post birth is where the return on investment (ROI) journey begins. Once the newly born calf turns seven months, it is then sold to a feedlot or slaughterhouse after which you receive returns.
This idea then means you simply cash in on livestock without doing the work of a farmer. Once you make an initial investment, you can monitor the performance of the cow using an app. But it’s not as straightforward because you have to pay $23 monthly to Livestock Wealth for feeding and taking care of your investment.
Speaking to CNN, founder and chief executive of South African startup Nututhuko Shezi says the idea is basically a “stock exchange environment where the farm is the company, the cows are the stock and the babies are the dividends.” He also revealed that they currently farm cattle for about 340 online investors but the major challenge remains satisfying investors and getting them returns as and when due and as you might be thinking, one must have a health herd to sustain such a business.
The way it all works is simple. Invest $1,000, after nine months your cow delivers a calf and after about seven months, the calf could weigh as much as 240Kg at which point it is sold to an abattoir for say $400. The money is then shared among the investors and investors might take pleasure in report that Livestock Wealth relies on the $23 monthly subscription fee to stay afloat and this means that they are currently not interested in sharing from the proceeds you make on your investment. The monthly fee covers basic insurance on the cow in the event of death from disease, investors can buy add-on life insurance for $4 a month
But the founder says his company is dealing with that challenge now by allowing investors even make purchases before they bring them to the farm for breeding and this deals with any potential capital flow problems. But he also tried to allay fears associated with the overall business model by saying beef is at the centre of the South African life and by extension the African life. This is true across the continent as is evident in households because of the availability of cows and only goats come second to cows with respect to average continental consumption.
On the investment side, Shezi says they are projecting between 18 and 20 percent for investors in 2017 which explains the overall optimism expressed in the interview with CNN where he also revealed the average price of beef has jumped by 22 percent so far this year.
Concluding the interview, Shezi tells CNN that their plan is to have investors by health seven month old calves in future and have them bred without hormones so that their meat can be sold as organic food.