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A cash cow? App sells investors shares in cattle

Video Credit: Reuters Studio - Duration: 02:09s - Published
A cash cow? App sells investors shares in cattle

A cash cow? App sells investors shares in cattle

A South African app is selling shares in individual cows and promising impressive returns.

Sam Holder reports.

The cows in this South African field may not look particularly extraordinary.

But there aren't many others attracting local and global investors.

The cattle grazing here are listed on a pioneering app: selling shares in each cow.

The concept is being dubbed "crowd-farming".

(SOUNDBITE) (English) LIVESTOCK WEALTH CHIEF EXECUTIVE, NTUTHUKO SHEZI, SAYING: "We started off on this farm four years ago with just 26 cows.

Across the platform now we have more than 2,000 cows that people have invested in.

Some people own 26 cows, one person, and others own a fraction of the cow where we group 20 people around one cow.

So we see this growth into us being an international company where people can invest from anywhere in the world." Prices start at around 40 U.S. dollars for a share in a young calf.

An entire pregnant cow costs more than 1,300 dollars.

But returns can be as high as 14% after 12 months.

That's due to a global rise in demand for beef.

(SOUNDBITE) (English) ECONOMIC ANALYST, WANDILE SIHLOBO, SAYING: "Personally, I think it's a great thing because if you look at the average age of a farmer in South Africa it's around about 62 years old.

So those very senior people.

Now to say how do you bring young people to the farms, but at the same time who are interested in being lawyers and accountants and economists, then this is the platform at which they come together to participate in a food sector." The cows are looked after by Livestock Wealth and are insured against illness and death.

But returns are affected by fluctuations in the cost of feed and the price of beef.

(SOUNDBITE) (English) LIVESTOCK WEALTH INVESTOR, COUSWELL PHOKWANI, SAYING "What drew me to this method of investment was the fact that I could invest in something that I could see so it's tangible." Livestock has long been seen as a measure of wealth across Africa.

This project, launched in 2015, now has 10% of investors coming from outside South Africa.

The question is: Can new apps and technology turn cattle into a global cash cow?




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