EdenFarm Aims for Profitability by End of 2023

Following corporate restructuring efforts, the startup agritech EdenFarm is taking a number of steps to achieve profitability which is targeted to be realized by the end of 2023.

Last September, EdenFarm laid off 300 employees following the decline in demand for vegetable distribution outside Jabodetabek - especially from the restaurant and market segments. Searched, Co-Founder EdenFarm David Setyadi Gunawan said that this weakening demand had occurred since the beginning of the year, also triggered by weather factors which caused commodity prices to fall.

"We don't know how long this weakening demand will last. Therefore, we decided to stop distribution outside Jabodetabek and we just exchanged it for seasoning products [TuangTuang], this is needed more. This is a difficult decision because we are cutting more than 300 people," he said when contacted DailySocial.id.

However, David revealed that the company had actually prepared anticipatory steps since the end of 2022 considering that tech-winter and economic weakness continues in Indonesia. His party began market research to develop TuangTuang seasoning products as a strategy towards profitability and getting out of the cycle of commodity price fluctuations.

"We see it is difficult to achieve funding this year compared to last year. Before, if not already break even, there is still funding. Now, we have to be very careful with the money we have because these fluctuations have a big impact on our efforts towards profitability this year. The step towards profit has been targeted at the end of 2022 once we obtain pre-series B. We are trying to strengthen the supply side. When venture funding "is reduced, there are no more price swings, so [the market] doesn't need to compete fiercely," explained David.

TuangTuang has been officially launched since early September, which is claimed to have received positive traction from the market. Tuang-Puang products are now available in 10 cities, and in the next two months they will enter supermarket outlets.

David added that developing and marketing TuangTuang does not cost a lot of money. When compared to its core business, vegetable distribution requires around 600 people, while TuangTuang needs one person to handle one city/province.

Currently, EdenFarm's main income is still contributed by vegetable distribution in the Jabodetabek area. "TuangTuang has just launched so the [sales] portion is still small, around IDR 1,5 billion. We are targeting that next year TuangTuang can contribute 30% to EdenFarm's total revenue."

EdenFarm Funding

Last time, EdenFarm accepted B pre-series funding in late 2022 led by Telkomsel Innovation Partners (TMI). Some of the previous investors who have participated in EdenFarm funding are AC Ventures, AppWorks, Y Combinator, and Investible.

David revealed that his current focus is on achieving profitability before opening new fundraising options. This is also because next year will enter the election year. Investors have the potential to refrain from investing so there is little possibility of raising funds in the first quarter of 2024.

With the downward trend in startup funding, he admits that the situation is different now compared to before. If in 2019-2020, for example, funding deals worth millions of dollars could be signed in just 1-2 months, now that is no longer possible.

"Past fundraising is done from revenue [metrics] alone because VCs invest from high growth companies. Now that can't be done. "Our [last pre-series B fundraising] process took around eight months, and even then we used data metrics from what we had been doing for several years - and the results were proven," he said.

His party remains open to new fundraising options considering that EdenFarm plans to launch several brand New F&B that has the potential to be exported. Meanwhile, currently the party is still trying to boost the growth of vegetable distribution in the culinary segment, adding contract farming, and driving the marketing of PourTuang.