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Rome, Italy – Feb 20th, 2008
Mark Davies
The challenges...
Long transaction chainsSmall volumesHighly varied
Poor standardsNo transparencyPrice instability
InefficientFew alternatives
market information systems are not new....
But have rarely worked for the people
How big is big?
9 principles:Communities will be the vehicleCommunity leaders the engine
Communities can be defined many waysUsers will not use PCs
Users should not have to use phonesWe enhance not re-invent business
We need mediators, mentors & teachersOur focus is on increasing choices & efficiencies
We are judged by our ability to put money in pockets
MIS consists of three elementsTo be successful:
technology
TradeNet
implementation
MISTOWA (wafrica)FOODNET (uganda)Technoserve (moz)
IFAD (vietnam?)
1 2 3biz model
TradeNet
Tradenet has most innovative Technology available:
Mobile2WebPeer2PeerFully CustomizableWeb Services
Spot Market PricesOffers to Buy & SellContact DirectoriesCustomizable Group SitesCustomizable Personal Sites
Interactive MapsRSS data feedsAutomatic SMS AlertsMulti-Country viewsMulti Currency Multi Language
technology
SMS2webSMS price uploadsSMS alerting service
Powerful SMS Alerting tools...
Powerful Price analysis tools...
this year so far...
Maps showing prices, offers, users...
Linking 533 markets in WA
Offers: mobile2web
RSS: custom views on your website
Customize host privileges & monitor data
But our real focus is on building tools for communities to express themselves...
Our philosophy is to reflect market activityNot re-invent it
Free tool for communities... A village, a filiére, an occupation...
Filiéres... prices, buyers, news, offers, etc....
Free websites for your members... Profile, history, photos, ranking...
Tradenet has most innovative Technology available today:Mobile2WebPeer2PeerFully CustomizableWeb Services
Spot Market PricesOffers to Buy & SellContact DirectoriesCustomizable Group SitesCustomizable Personal Sites
Interactive MapsRSS data feedsAutomatic SMS AlertsMulti-Country viewsMulti Currency Multi Language
Coming in 2008/2009:
Weather FeedsTransport ServicesAccounts & Payments
Field DataCrop ManagementCrop & Pest alerts
Inventory ControlSupply Chain FinancingBrokerage Services
Easier phone applications
Production data from field
planting
transportProcessing/storage
disease
maturing
But linkages are not just about producers & buyers...
There is a community at work
Inventory management & supplies for stockists and input suppliers
Improved inputs = improved productivity
“We can findCoca-cola everywhere but not seeds or fertilizer...”
Inventory management
SMS alerts on arrival, availability & cost
Plotting trucks via SMS onto TradeNet maps
Transport Alerts
implementation
p
We target the bottom half of the pyramid
Issues:PovertyLiteracyCultureAccessTrust
Smart implementation is key challenge to success!
mediation, sales, training local people & language permanence & trust transaction security/brokerage micro-businesses
tools to manage and reward data enumerators...
the model
How to generate revenues to pay for the services:
Group licenses
Basic FreeGold $800Platinum $2,600
SMS traffic
Cost to Recipient 3 cents
1 cent to Mobile operator2 cents to MIS system
Sponsorships & ads
Direct MarketingSMS branding
1 2 3
If 50,000 users average 5 alerts a week, annual revenues from SMS alone = USD$260,000
If 1% of Africa’s population gets five SMS a week = annual revenues of $46m
It’s a good business!Country Summary
2008 2009 2010 2011 2012
Expenses 565,402 544,348 697,096 773,572 871,362capex 60,000 20,000 20,000 10,000 10,000payroll 167,088 230,751 332,697 372,620 417,335
operations 99,000 111,360 125,299 141,026 158,779tradeagents 165,566 113,843 130,783 150,329 172,897contingency 73,748 68,393 88,317 99,596 112,352
Revenues 126,189 296,294 604,307 1,052,840 1,386,471
EBITDA -439,213 -248,053 -92,788 279,268 515,109
dd&a 20,000 20,000 20,000 20,000 20,000
EBIT -459,213 -268,053 -112,788 259,268 495,109
interest 24,000 24,000 24,000 24,000 24,000
EBT -483,213 -292,053 -136,788 235,268 471,109taxes 0 0 0 58,817 117,777 3,090,654
NET INCOME -483,213 -292,053 -136,788 176,451 353,332 3,463,9853,090,654
-463,213 -272,053 -116,788 196,451 3,463,985IRR 53% longterm debt amount 200,000
interest rate on debt 12%annual tax rate 25%
financing required -852,054 terminal multiple 6
© 2008 TradeNet Intl. Ltd.
0
200,000
400,000
600,000
800,000
1,000,000
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2008 2009 2010 2011 2012Expenses Revenues
The Country is a registered company setup in the target country to license and operate TradeNet as a franchise, with an 8% ($15,000 minimum) annual payment to TradeNet International annually. TradeNet Intl intends to own and operate two such countries (Ghana and Cote D'Ivoire) to develop the model. All other countries would be owned and operated by independent licensees. TradeNet targets to have 30 such countries operating within five years.The sample country we're using is Cote D'Ivoire.
53% return on $900K investmentProfitable in year 4 or 5
Value proposition for mobile operators
• Product differentiation• Brand enhancement (innovation)• Loyalty: Reduce SIM switching• Customer Acquisition (rural focus)• SMS revenues• Voice revenues• CSR: public/political benefits
• Huge marketing value to MIS
Results so far
• Launched officially January 2007• $200,000 revenues ($500,000 expenses)• 800,000 prices• 15 countries online• Over 500 markets covered• $1m in deals reported by MISTOWA (USAID)• 3,000 messages/day
• Not deployed appropriately• Finance, deployment, agents & patience• Monitor & evaluate to know
Proposed Expansion• 2007
(Mistowa/FoodNet)– Ghana– Nigeria– Uganda– Benin– Togo– Burkina– Senegal– Sierra Leone– Niger– Mali– Cote D’Ivoire– Guinea– The Gambia
• 2008 (in discussion)(IFAD, Technoserve, MCC, Chemonics, ABT, Telenor, CRS, LinkingLearners, ACDI-VOCA)
– Mozambique– Madagascar– Vietnam– Bangladesh & Pakistan– Honduras & Nicaragua– Cameroon– Tanzania– Kenya– Rwanda– Azerbijan– Sudan
