AgriClear enables users to search for cattle with certain attributes, post listings to buy or sell cattle, negotiate on price, arrange delivery details and settle disputes around cattle that do not meet contract terms. There are no upfront listing fees involved, but a $6 per head transaction fee for AgriClear. Payments for cattle are held in a system powered by NGX, a clearing and settlement subsidiary of TMX, until the cattle has been delivered and inspected by the buyer. The platform is accessible 24 hours a day and on a variety of devices including smart phones. There is also a rating system for both buyers and sellers.
The first of its kind to offer cattle buyers and sellers online transaction and payment services, AgriClear was the brain child of David Moss and Dr Nevil Speer who are now the president of AgriClear and vice president of US operations respectively.
“Neville and I are the subject matter experts as we were both born and raised in the livestock industry,” Moss told AgFunderNews. “We both recognised the inefficiencies in the cattle market and together with another partner started to define the model based on our experiences.”
Before AgriClear there existed some “mom and pop” online trading operations for cattle but without the financial payment and settlements part. “They tended to be built around advertising on the site and not around clearing,” said Moss.
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It was nearly four years before the joint venture was signed with TMX Group in January 2014. Until that point, Moss, Speer and their third partner Roland Labuhn, received just $80,000 in feasibility funding from the Alberta Livestock and Meat Agency. The rest was all “heavy lifting” on their own, according to Moss.
The company head out to pitch investors in 2013 after refining the business model and firming up the business case. By the middle of 2013, TMX Group was in due diligence. It was a clear match, according to Moss.
“We recognised the importance of financial settlement and TMX is the largest physical commodity clearing house in the world. They are also based in Calgary, so they were an obvious partner to speak to,” said Speer.
“TMX was looking for diversified markets and thought the concept had merit so did its own due diligence and after investigation felt it was a wonderful opportunity,” said Jim Oosterbaan, the president of NGX.
TMX was then able to bring in lots of expertise and helped to improve the model. The group’s credibility in the market and global presence was also key, according to Speer.
The combined experience of the founding team helped assuage some of the challenges facing start-ups such as regulation. Moss’s previous role as chief operating officer of Livestock Identification Services was particularly helpful in navigating the regulatory environment for commerce and cattle.
“I had a deep understanding of the regulatory framework and so we decided to stay unregulated and avoid areas of regulation that would have added a lot of cost and not much benefit,” said Moss.
Do they have any concerns about staying in the non-regulated space?
“No, to the contrary. AgriClear actually helps from a traceability perspective by connecting buyers and sellers directly. In reality this should help regulation and create a more definitive pathway for cattle traceability,” argued Moss.
Looking to the future, Moss, Speer and Oosterbaan think there is potential for AgriClear to be rolled out into other commodities – they are doing due diligence on others – and they are open to engage with other partners globally that are interested in the model.
But all efforts now are on proving this business first.