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Agritech Startups in Indonesia: Current trends and future Outlook

Updated: Apr 15, 2022

Indonesia has been known as one of the largest agrarian countries in the world. Indonesia is one of the main suppliers of multiple agricultural commodities ranging from palm oil, rice, cocoa, rubber, and spices. According to the Central Bureau of Statistics, the agriculture sector has contributed 13,7 percent of Indonesia’s total GDP in 2020 and 28 percent of Indonesia’s labor force in 2021.

To maximize the agricultural potential, various agritech startups have been established. These agritech startups fall into three categories. First, startups that aim to improve the access to the market (e-commerce) such as TaniHub and Sayurbox. These startups simplify the supply chain of agricultural products by replacing the role of middlemen. Second, startups that aim to improve the access to capital (fintech lending) such as TaniFund and TaniJoy. These startups organize a crowdlending effort by connecting farmers to public investors. Lastly, startups that aim to improve the access to technology such as eFishery and Habibi Garden. These types of startups focus on providing technologies to help local farmers.

Historical Trends and Improvement

1. From Land to the Sea

The number of agritech startups that focus on the marine sector began to increase between 2013 and 2016. Some of the notable startups are Aruna and JALA. Aruna was established in 2016, its business model capitalizes on introducing digital technology such as data collection to fishing practices. Another notable marine-focused startup is JALA. Similar to Aruna, JALA also focuses on modernizing fishing practices. JALA provides services to monitor salinity, PH, and temperature.

2. The mix of Fintech and Agritech (Agri-Fintech)

One of the concerning challenges in the agricultural sector is the lack of access to safe and fair financial support. This leads to the rise of agritech startups that operate on peer-to-peer (P2P) lending services. One of the most popular Agri-fintech startups is TaniGroup. TaniGroup was established in 2016 by launching TaniHub (e-commerce) and TaniFund (crowdlending). TaniFund aims to connect borrowers (local producers) to public lenders. By 2021, TaniHub has provided over 300 Million Rupiah of funds to the borrowers.

3. More Investors

From Indonesia Agritech Report 2020 by Compasslist, we can see that agritech startups in Indonesia have gained interest from local and international investors. For example, in 2020 TaniGroup and Chilibeli have collected $10 million investment. While Kedai Sayur and eFishery have gained around $5 Million in investment. Other top-funded startups are Elden Farm and Crowde who both collected around $1 Million of investment. According to Worldbank, aggregately in 2020, Agritech startups in Indonesia have attracted more than $165 Million of investments.

Future Outlook

1. Going Unicorn

Some fast-growing agritech startups are expected to gain unicorn status in the future. One of the strongest candidates is TaniHub. In 2021, TaniHub received $65 Million in funding to support its business expansion. With its strong performance, TaniHub is expected to gain more new investments in the future which possibly help it to gain unicorn status. Another worth mentioning candidate is eFishery. In early 2022, eFishery received $90 Million in funding, which is also the highest funding the world’s aquaculture startup has ever received.

2. Growing Consumer Base

According to Bappenas' prediction, the Indonesian population will grow to 305 million people by 2035. Population growth is in line with market growth. As agricultural products are an essential need in our daily life, it is projected that the consumer base of agritech startups will rapidly grow in the future. This is also supported by the increase in demand for healthy food products in the past few years, which has increased the demand for freshly produced agricultural products.

3. More Research and Development

The agriculture sector still has a lot to explore. Thus research and development in the agriculture industry are extremely needed to accelerate the growth of agritech startups. The initiative for more R&D in the agritech sector has shown a positive trend. According to Laporan Kinerja Kementan in 2020, the Indonesian government emphasized agricultural innovation and technology as one of its key targets in the future. The Agricultural Ministry aims to improve the implementation of agritech from 70 percent in 2021 to 75 percent in 2023 and 2024.

Are You Interested in Building an Agritech Startup?

Gear up is one of our partner that will help you navigate the never-ending challenges of building a startup. Gear Up is a startup brainstorming partner in Indonesia that provides one-on-one and catered support for the chosen startups. Gear Up can help you find the correct business model, gain funding for your startup from venture capital, and scale up your startup. Join Gear Up to begin your startup journey.

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