Investment Notes: Invest Inya Farmer (IIF)

In 2020-21 Australian agriculture saw a 17% increase in value to $71 billion. In a snapshot of the farming population, the Australian Bureau of Agricultural and Resource Economics and Sciences noted there were over 85,000 agricultural businesses in Australia, powering this massive industry.

With the creation of IIF, Nathan MacPhee sought to answer the question: “What if you could invest in this industry with the touch of a button?”. What he’s created to solve this problem is truly remarkable.

Today, we’re pleased to announce that we led Invest Inya Farmer (IIF)’s over-subscribed Seed round, and welcome the exciting and revolutionary startup to our Investible Early Stage Fund 2 portfolio.

We are also proud to be investing alongside AgFunder and a group of strategic HNW investors with connections to agriculture.  

Investing in agriculture has never been easier

In Australia alone, the agriculture industry faces a capital shortfall in excess of A$159 billion. IIF’s mission is to break down the barriers between the people who grow our food and those who consume it, all done through a consumer investing app that bridges the capital shortfall.

IIF has devised an innovative equity ownership model that helps farmers gain greater access to capital from day-to-day consumers who want to invest in what they eat. Structured as a cooperative, consumers-turned-investors can invest in the production cycles of farmers during the farming season and reap the harvest of their investments when the produce is sold.  

Investing into individual farm production cycles reduces the high initial upfront investment, diversifies their farming portfolio through various production cycles and provides returns within a few months.

The platform provides end-to-end transaction and tracking software for the investors and farmers. Investors are able to invest in a diversity of farms through the platform, track the progress of the production cycle via the live feed and updates from farmers, and receive their share of profit after the produce is sold. On the farmers’ side, they can list the produce on their farms and garner investments, update the portal of the production progress until harvest.  

The engagement between the farmer and investor in fundamental, whereby the farmer now has a direct channel to the end consumer of their produce and consumer awareness of agricultural practices is enhanced.

Within months of going live, IIF had connected more than 250 members across 20 farms (including cattle, lambs, oysters, beehives, crops and fruit), made over 800 trades, had 250 exits, and achieved a 15% average annualised yield.

Founder-solution fit

Nathan MacPhee was inspired to start IIF when he took a sabbatical during the pandemic. He lived in a farming community and considered starting his own farm but was concerned about the lack of access to capital that farmers face, the high risks that farmers undergo and the lack of connection to consumers. This motivated Nathan to found IIF.

Approaching this startup with a background as a financial services executive with many years of experience in Australia and abroad, his deep understanding of capital markets enabled him to identify the opportunity for a unique form of consumer-sourced capital that bridges the gap between farmers and investors.  

When you speak with Nathan, his passion and deep knowledge of the agricultural sector are palpable. Farmers are proud legacy builders who face unique challenges with respect to business growth, consumer demand, seasonality and finance. Having direct perspective in this space is vital for a founder.

Nathan recognised the capital shortfall farmers face is due to them being limited to legacy debt and bank financing with little access to capital alternatives. Meanwhile, agriculture investors traditionally invest in the assets of a farm, which is capital intensive and sees them realise their return on investments years later.

“We are not providing loans or debt to farmers. We’re not investing in their farm, but in what the farm grows. Our members essentially buy the crop, the fruit, the cow, the oyster or goats before they are ready. This provides a unique form of capital and liquidity for farmers some six or 12 months before they would otherwise get paid,” said Nathan.

IIF has unlocked a whole new class of investment for farmers: everyday consumers.

Investing in your food

Remember Farmville? The agriculture simulation video game enabled players to build their own farms, sharing the experience with friends. Now, imagine you can build a diversified portfolio of crops, livestock, aquaculture products and more, with real stakes and real upside.  

The beauty of IIF’s two-sided marketplace is that while farmers gain access to a new kind of capital, members of the coop are investing while finding a stronger connection to the food system.

Within its innovative smartphone app, IIF members can browse and participate in a variety of share-farming opportunities. As a user’s virtual farm grows, members can track holdings and through a direct connection via the app, farmers provide transparency around their farming practices and share regular updates about their produce.

It’s almost like Robinhood, Kickstarter and Farmville rolled beautifully into one.

The platform has attracted a variety of members: those who recognise the financial opportunity, those who seek to support local agriculture, and everyone in between.

Novelty aside, what really impressed us was the scalability of this solution. The platform has the potential to be available globally, connecting any farmer with any investor digitally. The structure creates endless possibilities and helps to make agricultural yields more accessible as an asset class for investors.  

As Nathan so beautifully puts it: “A dozen oysters, honey, apricots, ginger, beef. This isn’t a shopping list. It’s an investment portfolio”.

We’re extremely excited to join Nathan and the growing IIF team on their journey to reinvent the agriculture space, one farm at a time.

Read more on IIF's Seed round in this article by Business News Australia.