Climate Protection by Sprout

Our global food system is in peril, threatened by climate change, forgetting smallholder farmers that barely earn a living income and have no access to affordable agricultural coverage to protect them.

Sprout offers an all-in-one digital solution (smart contract on blockchain, weather intelligence and mobile payments) to protect smallholder farmers against climate events. We provide weather index crop insurance for unique crop/location combination in global commodities (i.e. Rice, Coffee, Cocoa, Cotton) alongside with mobile climate-smart agri alerts.

Sprout fully digitizes and automates insurance processes from creation, to customer registration and payouts. We work directly with smallholder farmers and their supply chains to bring climate protection at scale.

By doing so, we secure farmer income, improve food security, bring them confidence that they will not lose everything in case of weather shocks. We increase credit provider confidence to lend to them enabling smallholder farmers to improve their livelihoods year after year.

Smallholder farmers are vital for world food production and food security : Two billion people globally depend on 570 million smallholder and family farms for their livelihoods making this sector critically important (source: FAO) and some 35 million small-scale farming households participate in global supply chains (source: Farmer Income Lab).

A vast majority are already living in poverty (earning less than $3.10 per day, as defined by the World Bank) and even some in  extreme poverty (under $1.90 per day).

With such low income, any economic shock impacts a farmer’s ability to bounce back, as they often rely on their own savings. Absorbing the mounting risk of climate change and staying out of a cycle of poverty is an impossible ask for farmers. 

In the market today, there are no solution designed for them, answering their challenges, commercially viable for insurance companies, and financially accessible to them - less than 20% of smallholders globally having access to agricultural insurance coverage and less than 3% in sub-Saharan Africa (ISF Advisors, 2018).

Sprout uses a number of internet-based technologies in order to bring crop insurance to a large numbers of farmers and the supply chain users of the Sprout platform in a transparent, efficient and scalable way. Sprout starts by designing unique insurance for a group of farmers in a specific location using our automated program collecting and analyzing satellite weather data and farmer yield data to understand the impact weather (e.g. temperature, rainfall, humidity) has on farmer yields. We use actuarial models to determine the price of an insurance product based on the risks we see. Our insurance policies are underwritten by insurance companies and their risk models are programmed on our web application and blockchain smart contracts.

Throughout the season, the weather satellite data feeds into two parts of the platform. On an hourly basis, we look for weather shocks that farmers can prevent, monitor and manage the impact of, and when one is coming, farmers are alerted in real-time through mobile communication (SMS, USSD and Android). The weather data also informs the smart contract, which constantly calculates the payout for a farmer and automatically pays out to their mobile money wallets when the weather is the worst.

At Sprout, we serve smallholder farmers who are mainly women (Worldwide, women comprise 43 percent of the agricultural labor and it goes up to 80 percent of the smallholder farmers in Africa. Source - FAO) from South/Southeast Asia and Sub Saharan Africa farming global commodities - Rice, Coffee, Cocoa and Cotton.

They are struggling to generate a sustainable income out of their production, having no access to financial services and insurances enabling them to adapt to climate change and living in poverty (less than $3.10 per day, as defined by the World Bank), some even in extreme poverty (under $1.90 per day). 

Our technology and distribution strategy allows us to offer insurance in an inclusive way -- no longer will only large-scale farmers be able to protect themselves against climate events but smallholder farmers in rural and inaccessible areas in developing countries.

Sprout’s team has been working in smallholder farmer-fed supply chains for two decades. We understand from the farm to the fork the needs that push and pull food systems, demanding a high standard of quality and resilience. Smallholder farmers in export markets have similar needs to any business - access to market information, working capital, technical support and trusted partners. Yet we understand the downside of risks means a cycle of poverty, and therefore demands the right application of intervention. In order to make the best coverage available, Sprout analyzes the entire food supply chain, working with farmers, exporters and global buyers alike to deliver an unique product that addresses the important risks. Direct to farmers, Sprout has three channels of communication with regular requests for feedback -- via USSD, SMS and Android. Farmer feedback for Sprout is a main driver of innovation, as many value chain products lack farmer understanding and real-time support.

Giving access at scale to inclusive ag insurance to underserved populations.

In 2020, Sprout solution was chose by the World Bank as a tech partner to distribute existing weather index insurance to maize farmers - 1100 farmers in Eastern and Western Kenya. That pilot enable us to validate proof of concept and our solution as a technology.

We refined our business proposition as 1) Sprout is aiming to design and automatize creation processes of weather index insurance 2) focus on global value chains 3) Addition to weather intelligence.

We aim to pilot our new business proposition in the coming months

Traditional indemnity-based agriculture insurance is not commercially viable at scale for smallholder farmers (high transaction costs, moral hazard and processing delays) therefore few NGOs/public institutions (World Bank, CGIAR, CCAFS) have deployed programs offering weather index insurance for local crops, however these programs are funded and time limited not offering long term support to smallholder farmers and not leveraging latest technologies.

Leveraging existing mobile/digital technologies and recognized insurance tools (weather index insurance), Sprout disrupt the traditional insurance industry by fully digitizing and automating insurance processes (reducing costs).

Furthermore, we improve and enhance the customer experience by helping him/her to prepare and take actions in case of climate events (SMS Alerts).

Last but not least, we use a non-conventional way to reach out to smallholder farmers leveraging existing relationships between buyers and farmers. By involving industry leaders that are committed to improve the livelihoods of smallholder farmers in our approach (designing and distributing climate protection), we aim to create an industry standard to protect smallholder farmers against climate change. 

Current numbers, we are serving today - 1,100 maize farmers in Kenya

As part of World Bank study, Sprout was selected as a tech partner to distribute existing weather index insurance. We refine our business proposition following that pilot on our approach as we aim to be more than a tech partner but offering a full Climate Protection proposition

In one year, we will serve - 2,000 farmers

We aim to pilot our full new business proposition within the next year with identified partner in specific locations where we foresee future growth.

In 5 years, we aim to serve 60,000 smallholder farmers.

Our ambition is to reach millions of farmers in the next 5 to 10 years.

However we prioritize quality of the solution over growth in the next few years to ensure we have best-in-class products for this targeted populations. 

Number of insurance policies issued to farmers

Total value of insurance coverage for farmers

Number of farmers engaged in climate protection programs

Increased income of farmers

(Also see previous question)

6 total 

2 full time (Head of product - Growth & Partnerships)

4 contractors (researcher, blockchain developer, accountant, customer care manager)

Ashley King-Bischof, Founder, Head of Product, 

●        Technology and trading background with launching and growing tech startups in US, South Asia, East and West Africa

●        Founded multiple award-winning startups that tackle significant challenges faced by smallholder farmers and the global value chains they sell into

●        Background in Economics with an MBA from IE Business School and

●        Technical knowledge of web, Android and blockchain software and product development

Constance Fromont, Founder, 

Growth & Partnership

●        Food systems background with 10+ years at Mars (Food/Confectionary/Petcare)

Managing operations and distribution in warehousing, logistics and supply chain departments ->Expertise in End to End Supply Chain 

R&D background in Rice

Industrial Engineering Role

●        Background in Food Technology and Engineering with MS from Agro-ParisTech

●        English and French speaker

Sprout is owned and managed by two women, a unique profile for a for-profit tech startup. We also work with teammates in Asia and Africa who understand and sometimes experience the challenges of our farmer customers first-hand. This is critical to Sprout’s success as most farmers are low-income women based in African and Asian countries. Having a team that represents them means we understand their needs better and can build more attractive and better products. 

One of our founders and Head of Product has a strong, demonstrable track record of hiring, working with, promoting and supporting women of color in tech, evidenced by her work in growing technical teams for successful, VC-backed startups that operated globally: such as Yelp and Zipline. Historically tech teams in the US were mostly white men, but there are approaches to recruiting and management that can attract and retain diverse talent, which we incorporated into our company’s processes and ethos. It is only with a diverse and inclusive mindset that Sprout succeeds in scaling. 

Sprout is early-stage and yet we are tackling one of the biggest challenges we face around the world -- cycles of poverty perpetuated by climate change impact. While we have the ability to take on the leadership to solve this problem, with first-hand work experience and technical skills in food systems and digital inclusion, we undoubtedly need large-scale support. 

The Solve community is uniquely positioned at the intersection of social, climate, tech and financial inclusion, evidenced by the solutions and partners it has within it. Sprout would only benefit from learning and sharing with these partners as we scale to protect 1 million smallholder farmers. 

While Sprout has second-time founders and senior leadership, we recognize that this part in our journey is critical to get support. We are in the process of forming our advisory board and would benefit greatly from having successful (ideally women of color) leadership on our board. Areas include blockchain markets, insurance and data scientists. 

Additionally, a number of developing countries are yet to formalize their regulatory frameworks for weather index insurance. Support for managing regulation in new markets is of great need currently. 

Partnerships are very important to us at Sprout, as they are enabling us to scale with more knowledge and speed. Reaching scale means we are sustainable. Partners we would like to work with include: 

MIT faculty or initiatives:
D-Lab Faculty for inclusive climate insurance design: https://d-lab-mit-edu.ezproxyberklee.flo.org/
Blockchain faculty to advise our path to scale: http://mv.ezproxy.com.ezproxyberklee.flo.org/
 
Bill and Melinda Gates Foundation for funding large-scale research around data collection, data management and farmer impact from our solution. 
 
MIT Solve Partners: ISeeChange : Communities Reporting on Climate Change to inform our AI designed weather index insurance protection

Sprout is advancing access to digital inclusion through the use of mobile technology that is accessible to smallholder farmers in developing countries. Farmers often do not have access to smartphones, and use low-tech mobile technology to communicate. That said, Sprout has an engagement approach that brings useful data from basic mobile devices at the farm-level to a a central location so that farmers have (sometimes their first) fully digital profile. This is used to create insurance coverage for farmers, but also can be leveraged for other digital financial services in the Sprout ecosystem. Sprout is already partnering with Rabo Foundation in an OpenIDEO Challenge to leverage this digital profile for farmer loans. 

We are advancing inclusion, but also in a way that brings farmers along the journey. Prize money from the HP Prize for Advancing Digital Equity would go directly to the Sprout solution and expand farmer access to the digital economy. 

Most smallholder farmers are women! They power the food systems we need in order to feed ourselves. Empowering women with the right digital tools to grow their farm business is critical for development. Our team is run by women, passionate about making sure women are advancing equitably alongside men. 

Women invest in their communities more than 2 times men when they earn more income. Investing in women is investing in communities, something Sprout knows very well. When women are able to accept and send mobile money payments, evidence also shows they can save more -- making them and their families keep more income. 

Our mobile application uses direct-to-farmer communication and includes a user-friendly experience, as well as a mobile money component for sending and receiving payments, which makes Sprout incredibly friendly to women farmers. We use their voices in our feedback channel to improve the timing, and type of communication they need in order to protect themselves against weather events. We would directly use the funds from the Innovation for Women Prize to increase women participation in digital inclusions, especially around income generating activities on their farm.

The 570 million smallholder farmers around the world, impacted but their rural, paper-based economies has left them out of the enormous opportunities in the digital age. Sprout brings farmers and their data into our platform in order to improve their access to digital financial services, especially climate protection in the form of insurance and digital weather alerts. 

There is a lot of unrecorded and untapped data at the farmer level in developing countries. Sprout is committed to digitizing that data through our farmer-friendly mobile applications, and then understanding how the weather impacts this data. Sprout uses AI to improve its weather index insurance models. As Sprout grows, we will digitize more farmer data and be able to continue to update and improve our models with new farmer and satellite data. 

The AI for Humanity Prize will help us to improve our model and bring new training data through the registration of farmers in critical value chains -- coffee and rice -- projects that require funding for the digitization process. 

As smallholder farmers in developing countries are still coming into the digital age, it's not easy to find appropriate applications for blockchain (due to cost and farmer access to the internet). That said, there is an enormous amount of risk that farmers face (markets, climate change, etc), which means they need to work with supply chain partners and technology that they can trust. Blockchain has many benefits, and trust is unequivocally one.

Sprout's origins are in bringing weather index insurance to smallholder farmers through the use of blockchain. Our founding team saw the use case as uniquely relevant to rural populations given their need for trust and given that insurance companies have an inherent conflict of interest as they both manage the risk and the claims payout process. Blockchain also offers automation in the claims process, which reduces make administrative costs. Sprout believes that the use of blockchain will bring both trust and reduce costs to crop insurance for farmers, in a way that gives farmers access to affordable insurance like they have often never had. 

The GSR Prize is the best fitting prize for Sprout as we align deeply with inclusion and blockchain for insurance. We will use the GSR Prize to build more weather index crop insurance products that run on blockchain. Those products will be in coffee and rice, in Kenya and Cambodia respectively. Having these products ready will allow us to onboard more farmers, bringing them protection against climate risks.