Indonesians depend heavily on agriculture. The sector is among the top three contributors to the country’s GDP, along with the processing industry and trade. The government’s own data suggests the sector to be growing 3.8 per cent YoY, and would surge between 3.9-4.1 per cent in 2019. However, like any other countries, Indonesia’s farmers are faced with various problems. To their rescue are country’s homegrown agritech startups.

One such startup, TaniGroup, has closed US$10 million Series A funding, led by Singapore-headquartered venture capital firm, Openspace Ventures, with participation from investment firms: Intudo Ventures, Golden Gate Ventures, and fintech accelerator DFS Lab.

The three-year-old startup would be utilising the funds towards expanding its ecommerce reach across Indonesia, developing new products, and supporting its growth through the year. Currently, it operates from five regional offices and distribution hubs located in Jakarta, Bogor and Bandung in West Java, and Yogyakarta and Surabaya in East Java.

Indonesia’s ecommerce sector is the most popular vertical for investors. According to e27 Southeast Asia Startup Ecosystem Report 2018, Indonesia’s ecommerce startups raised US$1.1 billion funding in 2018. The same report, citing Google-Temasek, indicates the sector to be one of the fastest growing after online media and ride-hailing.

Offerings

“Indonesia’s farming sector still lacks a proper platform that connects farmers with buyers of their agriculture produce,” said TaniGroup’s co-founder, Pamitra Wineka.

The group operates a mobile-based online marketplace TaniHub that sells agricultural produce and also runs a lending platform TaniFund that connects farmers in need of loans with burrowers.

So far, the startup has managed to onboard agricultural produce from more than 25,000 farmers. Its offering is driven through both B2B and B2C marketplaces offering fresh produce sourced directly from farmers. While B2B driving the majority of its business, its B2C monetisation model is a farm-to-table application that connects farmers directly with SMEs and individual customers.

On the other hand, the startup had set up its loan lending platform TaniFund in 2017, which acts as a catalyst in the farmers’ supply chain, and provides farmers with access to markets and finance. The crowdsourcing platform also provides more clarity to both the borrower and lender on credit standing and terms. The fund is registered with the government-administered regulator, Financial Services Authority (OJK).

“Accessing multiple channels of demand, farmers can sell fresh produce to TaniHub, while TaniFund can help with funding needs for cultivation. We will be rolling out several other supporting platforms which will further improve agricultural decision-making,” Wineka said.

Investor’s Take

Openspace Ventures, which is currently deploying capital from its second fund, generally invests on Southeast Asia-based early-stage startups across fintech, healthtech, edtech, consumer applications, and agritech sectors. The VC has more than US$225 million assets under management, and has previously invested in startups such as cab aggregator Go-Jek, and pharmaceutical products delivery startup, Halodoc.

On the latest investment, Shane Chesson, partner at Openspace Ventures, says, “TaniHub is building innovation into a massive sector, barely touched by digitisation, a true Openspace. We look forward to working with the TaniHub team in creating a deeper technology platform and broader reach.”

Recently, another Indonesian startup Kedai Sayur raised a seed funding round of $1.3 million led by early-stage venture fund East Ventures. The startup empowers vegetable hawkers by way of connecting them with its network of daily produce distributors. Similarly, there are many startups offering online marketplace for agricultural produce such as Sayurbox, Regopantes and Brambang.