Invest Inya Farmer turns farm produce into a new asset class
Summary
Victorian-based startup Invest Inya Farmer (IIF), armed with $1.1 million in seed capital, has launched a world first asset class that allows city dwellers to invest in agricultural production without physically owning a farm.For members of the IIF co-operative, a dozen oysters, a jar of honey, or a bag of peaches, ginger and beef isnt a shopping list. Its an investment portfolio of farm produce that not only allows people to grab a share of Australias farm gate but gives rural producers early access to working capital to grow their businesses faster.In my farm I have beehives in the Northern Territory, cattle in Queensland, NSW and Tasmania, and oysters in two states and some in New Zealand, IIF founder Nathan MacPhee tells Business News Australia.We effectively invest into production cycles and when those assets are matured and harvested our members share in those profits.The portfolio mix could be as simple as a dozen oysters, a single apricot tree or a cow, providing IIF members a share of production from farms across Australia and New Zealand.The concept has caught the imagination of early-stage venture capital group Investible, as well as US-based AgFunder, which participated in the seed funding round in December.The capital partners are now keen to see IIF launch the business in Australia and test the model in the US, with the broader aim to benefit primary producers by giving them access to working capital without literally having to sell the farm.IIF adopts a co-operative model that MacPhee describes as a world-first concept. The co-operative comprises a mix of primary producers and investors, all of whom are classed as members.Normally co-operatives exist for farmers to get their products to consumers, but we created a co-operative for consumers to become farmers, says MacPhee, who has decades of experience in finance and funds management.The model has been tested in Australia over the past two years, delivering 800 transactions across 20 farms in five states and annualised returns to members of about 15 per cent.Over the past two years we have been quietly developing this model across most types of farming including lamb, eggs, wine grapes, fruit and crops - a whole range of things.What makes us unique is that we are not providing loans or debt to farmers. Then we started talking to more farmers, learned about their challenges and the industrys need for capital and the undue risk they take.MacPhee reveals that IIF has hundreds of members on the investor side.We want to reach 1000 users on the platform by September and we see that as controlled growth.We have demonstrated that we can scale. Theyre a good team who get what were doing.Investible principal Jayden Basha says IIF solves a real pain point for farmers, while also educating consumers.Nathan and his team are tapping into a huge market of people seeking a stronger connection with what they eat, Basha says.By directly backing farmers with the upside of earning tangible returns, its profit with purpose.IIF plans to use the seed funding to build out the technological foundations of the business to scale up on both sides of its marketplace.Already IIF has created hundreds of new farmers in the city and its only just the beginning, says MacPhee.We are literally only just pulling the covers off this.