In May, the Nigerian crowdfunding platform, Agriculture thrives, came under review after being accused of failing to pay subscribers.
But he is best known for his consumer-centric approach. The startup makes it easy for clients to finance farms and promises to deliver profitable returns within a set time frame, typically 6-9 months.
This value proposition is what earned the startup the backing of companies like the Abuja-based early stage venture capitalist, Venture Capital Platform Fund; and a US-based startup accelerator, Y Combiner. Hence, they have made a name for themselves among consumers as a trustworthy farm crowdfunding platform.
Until April of this year, the company was proud to keep its promises; Therefore, it came as a surprise when many complaints started to surface.
Techpoint Africa to reach to Eje, the startup’s CEO, at the time and while addressing the issue, he attributed the payment issues to the pandemic and to the buyers. He also said investors understood the company was working to resolve the complaints.
“One challenge we have had to face in recent times has been to deal with delays from our buyers in paying for delivered goods. This operational challenge has caused temporary delays in payment for some of our users; so what we did was be transparent and then commit to a period of time for the payments to be made. It is really heartwarming to see their welcome and their total understanding, ”he said.
Well, that doesn’t appear to be the case six months later.
Increase in payment default
Although the three-year-old startup claims to be transparent in communication, many followers have recently come out to accuse the startup of keeping quiet since they started dealing with these issues.
Chinyelu Chidozie, a Thrive Agric subscriber, recounted his ordeal in a Medium post. According to him, he heard about the company’s problems in May or June. Still, he believed the temporary delays would be sorted out just in time for his investments to mature between September and December.
But he got a call from the platform saying his payments would be delayed a week before the first of his investments was due.
Like Chidozie, other subscribers received similar information about late payments in September.
Then things got worse.
Subscribers claimed that while this was happening, the YC-backed startup began to dodge questions about their social media payments, even going so far as to remove comments on the issue. But following a series of discussions and follower explosions, Thrive Agric was forced to communicate.
Similar to what the CEO told us in May, in a letter sent to its subscribers, Thrive Agric blamed the COVID-19 pandemic, subsequent lockdowns and buyers for its struggles.
Plus, subscribers wouldn’t have to wait more than two years to receive their ROIs.
“Payments will be made in the order of the original farm subscription due dates, but no more than 12/24 months in arrears. We say 12/24 months because it will take full farming seasons for the business to fully recover and we prefer to make a promise that we can confidently keep, ”the letter read.
Facing more heat from subscribers after the outrageous news, the startup released a statement on Twitter.
Dear Thrive Agric subscribers and partners:
By now you may be aware that payments for some farm subscriptions are delayed. This is an unfortunate result of the COVID-19 pandemic and the resulting restrictions on physical access to farms and agricultural markets.
– Thrive Agric (@thriveagric) October 2, 2020
But having reneged on many promises, the company may have completely lost the confidence of its subscribers, some of whom only want their capital; they also ask about the insurance policy the startup claims to have in the first place.
What is the role of business insurance in all of this?
In the About Us section on the company’s website, Thrive Agric writes a warm message to its subscribers: You’re covered, sure.
“We always protect you and the farmers from yield uncertainty. All of our farms are fully insured by Leadway Insurance and in the event that farms are infested, unusual mortality rates or any other unfortunate event, your capital is insured, ”the message read.
This begs the question; why can’t the agro-financing platform at least return the capital of its subscribers?
@thriveagric , you said that the capital is insured in case of losses, you do not contact your insurance company for those whose crop resulted in a loss rather than asking us to pay? You have lost your integrity! #ThriveAgricPayYourInvestors #ThriveAgricPayup
– Pacsandra (@pacsandra) October 5, 2020
The pandemic caught most businesses off guard, but one would have thought that the startup’s insurance policy would cover any damage during that time.
However, according to Eje, Access road insurance does not cover losses incurred as a result of activities before and after farming. In the case of Thrive Agric, this translates into a delay in delivering produce to farmers and buyers who have not paid on time.
“What Leadway covers are activities from the start of farming. And if, for example, there is mortality on the farm, Leadway will cover that. “
Track insurance, on the other hand, says it doesn’t cover any of that if it’s because of the pandemic. The information on the insurance company’s website says,
“Note that loss or damage to crops, livestock, poultry or insured farms directly or indirectly attributable or caused by the adverse consequences of the outbreak of the COVID-19 pandemic which in turn affect the management or operations of the farm are not covered by the policy.
Endless in view of this ordeal, Thrive Agric recently released FAQs addressing key issues around payment terms. However, subscribers are fed up and counting until the day they plan to take legal action against the company if they are not paid quickly.