Fresh Factory Receives Initial Stage Funding of 66 Billion Rupiah Led by East Ventures

Solution provider startup fulfillment cold chain (cold chains) Fresh Factory succeeded in obtaining initial funding or seed funding worth $4,5 million or equivalent to 66 billion Rupiah led by East Ventures. This round was also attended by several other investors, including PT. Saratoga Investama Sedaya TBK, Trihill Capital, Indogen Capital, Prasetia Dwidharma, Number Capital, Y Combinator, and several investors angel other.

This fresh fund is planned to be allocated for warehouse expansion to all secondary cities in Java as well as main cities in Sumatra and Sulawesi. In addition, this investment will also be used to strengthen the team and technology to increase adoption and operational achievement of the company.

Founded in 2020 by Larry Ridwan (Founder & CEO), Widijastoro Nugroho (Co-Founder & CCO), and Andre Septiano (Co-Founder & CFO), Fresh Factory recognizes the magnitude of the problem with cold chain logistics in Indonesia. Therefore, the company is committed to providing a central network fulfillment hyperlocal cold chain, transformation and management system fulfillment smart systems that enable businesses to store, retrieve, package and deliver their products to customers better, faster and more efficiently.

As a country with abundant resources from agriculture and aquaculture, Indonesia has a need for efficient cold chain logistics for storage and delivery from production centers to customers. However, there is still a big gap in the distribution circle that only focuses on the central warehouse without paying attention to logistics Mid and last mile. Fresh Factory wants to bridge this by establishing coldstorage smart in various locations close to the customer.

Some of the technology solutions that have been integrated into their services include GeoTagging and GeoLocation for storing products in warehouses, Artificial Intelligence (AI) for projection and stock management in warehouses, and Internet of Things (IoT) for temperature monitoring. freezer and Chilling.

East Ventures Venture Partner Avin Sugiarto said, "Given the huge gap in cold chain solutions and how it causes various problems related to food loss in the supply chain, we believe Fresh Factory is here as a solution to improve cold chain logistics for perishable food products and help SMEs. We believe Fresh Factory has been and will continue to benefit and create a more resilient society."

As of April 2022, Fresh Factory has achieved $10 million annual GMV and annual fulfillment for more than 1 million orders. This was followed by revenue growth of 30% MoM in the last three months. The company also has more than 20 branch warehouses spread across various cities in Java, Sumatra, Sulawesi, and Bali with frozen to cold storage solutions.

Services fulfillment in Indonesia

The growth of e-commerce has more or less affected the fulfillment services landscape or fulfillment. Indonesia is currently the largest e-commerce market in Southeast Asia with a contribution of up to 50% of all recorded transactions. This growth marks the major contribution of e-commerce to the digital economy in Indonesia.

Quoted from the e-Conomy SEA 2021 report, Indonesia's digital economy has increased from USD 47 billion in 2020 to USD 70 billion in 2021, coupled with digital penetration which continues to increase, amounting to 158 million e-commerce users in Indonesia.

Meanwhile, according to a report from Research and Markets, the services market fulfillment globally is expected to reach $198,62 billion by 2030, growing at a CAGR of 9,5% over the forecast period. The fast penetration of internet services and the increasing number of online shoppers are the main factors driving the demand for services fulfillment around the world.

The maneuver of the country's e-commerce players to enter the fulfillment business is considered very good by providing integrated logistics services. This step was first taken by Tokopedia by launching its online service Branch Store which is now transformed into Tokopedia Served. The service allows sellers to store products in "smart warehouses" in high-demand areas.

Furthermore, Bukalapak is also targeting this segment through services OpenWarehouse which has been used by pelapak since March 2020. Buka Gudang has two partners fulfillment, namely PT IDCommerce and startup provider of micro-warehousing network Crewdible. Then, there is Shopee which officially enters through the service Managed by Shopee last September. The Shopee Managed Service utilizes its own warehouse with an average of orders claimed to be delivered two hours after the user completes the transaction.

Apart from e-commerce players penetrating the fulfillment, a number of local startups are also focusing on working on micro-warehousing networks and their procurement solutions to create an efficiency impact. Some of them include Crewdible, Shipper, and TokoTalk.