Meet the Entrepreneur: Simon Ulvund, Meridia
At FINCA Ventures, we look for entrepreneurs leveraging market-based solutions to create large-scale, lasting social impact. In this series, “Meet the Entrepreneur,” we’ll be taking you into the minds of the intrepid leaders at our portfolio companies who boldly venture into markets in need of positive disruption.
Roughly 70 percent of the world’s population lives on land without formal legal documentation. Without clarity on land boundaries, or access to formalized land titles, groups like smallholder farmers are left insecure and have less incentive to invest in improving their land productivity because they are more vulnerable to land disputes and evictions. This has an impact on farmers ability to plan for the future, generate more income, and access finance, perpetuating the cycle of poverty. Leveraging a strong combination of tech and touch, Meridia co-founders Simon Ulvund and Thomas Vaassen are revolutionizing the way that land mapping and titling takes place in low-resource settings. In this interview, we spoke with Simon Ulvund, co-founder of Meridia, to discover how the company is helping smallholder farmers to unlock land value and secure ownership at scale.
How did you and your co-founder Thomas cross paths and what is the origin story of Meridia?
Simon: We previously collaborated on an Impact Hub project, for which I served as global managing director. Thomas was the founding chairman, so we’ve known each other for about seven years. We spoke about our next steps over a beer in a bar and how we were both interested in doing something with land. As a result, we spent about six to eight months researching land titling – how people were affected by the lack of a land title, and what it meant to do land formalization. We traveled to different locations, spoke with different people, and read many scholarly and literary reports to gain a thorough understanding of the problem before proposing a solution. Meridia was created by Thomas and me after extensive research and several brainstorming sessions.
Smallholder farmers across Africa are crucial to the food supply chain, yet they face many hardships that impact productivity. Can you explain the role that land rights play here, and why Meridia has chosen to specifically address this issue?
Simon: Land is critical for the vast majority of rural populations and places like Sub-Saharan Africa, Southeast Asia and much of South and central America. In a country like Ghana for example, about 90 percent of the smallholder population don’t have formal land rights. If farmers are challenged in court by a higher authority figure, or in conflict with a neighbor, they have very limited ability to prove that they own the rights to their land. In most instances, when it comes to women’s rights, land is passed on to the next male in the family. While a woman can farm a piece of land with her husband, she will not be able to inherit it if she becomes a widow. Instead, the next male in his or her family inherits it.
As land rights are a challenge across sub-Saharan Africa, and in other emerging markets, why did your team choose Ghana to start its operations?
Simon: When we discussed our goals with others, Ghana came highly recommended, and we decided that it was a good fit. Since English is one of Ghana’s official languages and is spoken by most of the population, there was no language barrier to overcome. Ghana also has a stable political economy, which has resulted in World Bank, USAID, and other development agencies assisting with land administration and documentation.
Although much of Sub-Saharan Africa has traditional land practices, such as having to go through a hierarchal process to secure documentation, small-holder farmers in Ghana profit from a more direct method of obtaining land documentation. This encourages startups in the early stages of their journey to work from the bottom up rather than the top down. We were able to use this bottom-up method in Ghana, where we used a community-focused approach to build a fool-proof model that proved to be adaptable to local changes and variations.
Meridia bundles GIS technology, ground operations, and land documentation workflow software to reduce the costs of land formalization for smallholder farmers. Why is this integration important and how has it helped to provide land mapping and land titling services at scale?
Simon: Ghanaian smallholder farmers are around a 12-hour drive from major cities including Accra and Kumasi. As a result, to acquire land documents, they must pay a licensed surveyor located in one of those major cities to travel to their location and complete the process manually. This procedure can be inconvenient and costly, and many farmers cannot afford it, so they opt out. We concluded that if we were to make an impact, we needed to provide a comprehensive service. This included building trust with the traditional customary leaders in Ghana, as well as working to sensitize the community and educating them on land rights. Our full-service model handles all the logistics of obtaining land documentation and provides ease to our clients.
What has been the biggest challenge you’ve faced in designing technology that works in the type of rural environment that these smallholder farmers operate in?
Simon: We face a few challenges, including varying climate conditions, and working in inclement weather can be challenging. The lack of a reliable internet connection has been another major issue. We’ve had hiccups with the lack of a secure internet connection in some villages, so we developed technology that allows us to compress the data we collect and synchronize it with our server as soon as we regain a stable connection. Ultimately, we were able to create a lean and productive framework that eliminated the need for us to take several trips into the field. We simply process all the data in one setting. As a result, we’ve become more efficient and can save on costs.
Our GPS equipment must also be cutting-edge and up to date. In terms of collecting an accurate measurement of a data point, typical GPS chips found in a cell phone or tablet aren’t up to the job because they’re much less precise. Every country in which we operate has required us to ensure that we are legally compliant. The question persisted, however: how do you find hardware that is accurate? We had no choice but to create our own algorithms as an immediate solution. We’ve also had to build our own post-processing scripts to clean out the data and produce a product that complied with legal standards. That posed a huge challenge for us, but we were able to successfully deliver.
Meridia’s model now focuses on partnering with large AgriProcessors and traders to provide land mapping and titling services to their smallholder farmer outgrower networks. What value is Meridia bringing to these organizations, and how do you work with them to improve the livelihoods of their farmers?
Simon: Land documentation truly shifts a farmer’s outlook on the lifespan of their farm. In Ghana and Ivory Coast, we’re seeing a double digit increase in productivity with cocoa farmers. Getting a land document is advantageous to these farmers because it allows them to make longer-term investments. They also tend to attract lending options because the bank knows they’ll be around for a long time, which improves their credit score. Land documentation is then used to make a structural investment in the supply chain, which benefits the business significantly. In the last two to three years, many large organizations have shown interest in ensuring that their entire supply chain has land titles because it can boost their sustainability initiatives, farmers can earn a fair living wage, and the supply chain’s quality can improve, all of which is good for business.
It’s five years from now and Meridia has made international headlines. What would the headline be and why?
Simon: I believe the headline would read, “Within Two to Three Value Chains, Meridia Helped the Number of Farmers with Land Documentation Soar.” Essentially, businesses are investing in land documentation because it is growing in popularity, and they see the value it brings to their sustainability projects and global commitments. Donors will contribute and support efforts to de-risk and scale the industry as more businesses invest.
What are the top two to three barriers Meridia faces in achieving this vision?
Simon: With the help of development agencies who are stepping up to finance what isn’t commercially attractive to pay for, we’re well on our way to fulfilling this headline. Although obtaining government approval is a job that we excel at, it could become a stumbling block because we depend on the government’s involvement to succeed. Fortunately, I believe that most governments with whom we speak recognize that our vision is consistent with their policies and needs.
However, they can be slow in decision making which can cause delays. The cost of documentation may also be a deterrent. For example, in Ghana, we have reduced the cost of documentation by 50 to 80 percent, depending on the region, which is a substantial reduction, but smallholders still find it difficult to pay. This is mostly due to the additional fees that they must pay on top of the cost of acquiring land documents.
True scalability, I believe, hinges on whether we can bring in ample funding. We’ve seen businesses willing to pay up to 80 percent, but for a poor farmer who has to prioritize what they’re buying every day and might have to miss a meal now and then, having cash on hand for a land document is not something they have the bandwidth for. While there’s a willingness to pay, they might not be able to do so. If we can find the right candidates for this plan, who can de-risk these efforts by contributing financially to ensure that we can lower costs, I believe we’ll be better positioned to grow.
Why were you excited to have FINCA Ventures come on-board as an investor?
Simon: One of our key objectives is to find concrete ways to demonstrate that land titling has an immediate rather than a long-term effect on farmers. This is where I believe FINCA comes in because the solution is to provide access to finance, as a land title can work as collateral for a rural financing institution. We’ve seen rural financial institutions in Ghana take leaseholds and use them to perform cashflow-based credit scoring of their smallholders, since the crops that farmers grow on their land are their primary source of income.
After evaluating the commodity, financial institutions can estimate a farmer’s income and offer financing that they would otherwise never qualify for. Farmers can be set up with better structured financing that considers their interests as a consumer lender and provides better protection, among other things. We’re looking forward to learning from FINCA Ventures’ experience as a fundamental financial institution, as well as any possible scaling opportunities that could help Meridia expand and promote a partnership between land titling and access to finance.