Revolutionizing the farm-to-market ecosystem in Indonesia
Agriculture is a vital cog in the Indonesian economy and society. It accounts for 13% of the country’s GDP and employs 29% of the workforce. Small farmers form the backbone of this sector, with 85% of the 33M farmers operating in hard-to-reach rural areas and each controlling less than 2 hectares of land.
The Indonesian farming ecosystem, from financing to inputs to technology, is largely traditional, unstructured, and fragmented. These small farmers earn an average income of only USD 3.2 per day, compared to the national per capita income of USD 10 per day (2021). Lack of adequate financing, limited access to modern technology, inefficient supply chain, and inconsistent prices are some of the biggest challenges faced by local farmers on a daily basis. Rizal, a vegetable farmer in Bogor, West Java, recounts this daily struggle. “… [Our] only option is to sell produce to middlemen in the central market. It is an everyday battle to secure fair and consistent prices. Moreover, the traders often only purchase the high-quality produce, making it hard to sell or even dispose of the rest of our produce at times.”
Overcoming these challenges, EdenFarm, an agritech eCommerce platform in Indonesia, is leading a digital revolution in this large and underserved market. With a B2B (business-to-business) focus, EdenFarm distributes fresh produce from farmers to food service customers that comprise restaurants, street vendors, and caterers. By introducing advanced farming technology and advisory services, the platform is not only improving the farmers’ livelihoods but also building a more efficient food supply chain in the course.
Why we invested in EdenFarm
1/ Unlocking market stability – By reducing the number of intermediaries between farmers (suppliers) and B2B customers, EdenFarm is reducing barriers to access markets. Having close relationships with both farmers and customers, EdenFarm is able to predict market demand and supply more accurately, thereby providing stable prices and creating a win-win situation for all the involved parties.
2/ Building a food supply chain for the future – EdenFarm continues to make interventions to improve the efficiency of the overall food supply chain in the country. On the production side, EdenFarm brings precision farming technologies and hyperlocal insights to farmers to improve the productivity and sustainability of farming operations. On the consumption side, EdenFarm works with a diversified customer base spanning traditional wet markets to culinary businesses that can utilize all quality/grades of produce, thereby reducing wastage. Moreover, EdenFarm manages the end-to-end logistics through its collection facilities and fulfillment centers, allowing it to have full control over product sorting, grading, and packaging, and minimizing food loss by streamlining touchpoints. Their wastage has been at nearly 0% thus far.
3/ Prepared to capitalize on a huge market potential – Indonesia’s agritech space is forecasted to substantially grow at an estimated CAGR of 31% during 2022-2026. EdenFarm is well-positioned to benefit from this growth with its unique and resilient business model. The company has already demonstrated solid potential, building a multi-layered upstream capability with a trusted network of 5,500 farmers and suppliers in a span of 5 years. On the demand side, focusing on the pandemic-proof traditional culinary businesses and wet markets has proved to be an excellent strategy to build resilience, particularly amid the recent pandemic and economic downturn.
4/ Strong positive impact intent and results – EdenFarm is making steadfast progress towards its vision to “feed the nation.” Not only has the company helped increase farmers’ income levels, but they have also positively impacted village sociology through farmer education and the creation of employment opportunities for farmers’ families at collection facilities. Furthermore, by optimizing the food supply chain, EdenFarm has been able to minimize produce waste, while lowering food costs for consumers by 30%.
5/ Agile and execution-focused leadership – The founding team—David Gunawan (CEO), Ramavito Mountaino (CFO) and Febrianto Gamal (COO)—has demonstrated exemplary leadership and execution capabilities, making EdenFarm the leading B2B agritech e-commerce player in Indonesia today. The team’s in-depth understanding of the local markets and customer base is particularly impressive, which has allowed them to nimbly adapt to the changing market conditions in the past.
Rizal, the vegetable farmer, started partnering 3 years ago with EdenFarm. Reflecting on the partnership, he said, “EdenFarm has helped ensure more visibility to the end market, along with stable and higher prices as compared to the central market. I am happy that EdenFarm can take all commodity product types and grades, making it convenient for me. To add to that, my EdenFarm farmer relationship officer, Egi, has been extremely supportive in educating me about land and nutrition management and adopting irrigation drip technology. I speak with Egi on a daily basis over the phone – it’s like we are dating each other!”
We were first introduced to EdenFarm by AC Ventures, our local early-stage VC partner and a leading early-stage investor in Indonesia. AC Ventures has known the founders since 2020 when they first invested in EdenFarm’s pre-series A round and since then, have continued to support the founders in establishing product-market fit, developing relationships with various partners in the ecosystem, and subsequent fundraising.
Capria recently invested in EdenFarm’s pre-series B round alongside lead investor TMI Ventures (venture arm of Telkomsel, the leading Indonesian telco), and other investors Appworks and AC Ventures. We are delighted to support EdenFarm in their journey to drive this transformational change to improve the livelihoods of farmers and small and medium enterprises’ (SMEs), create resilient and sustainable food supply chains, and increase access to affordable, high-quality food for consumers in Indonesia.
