Seeing Industry Readiness to Enter the Agritech 2.0 Era

It took eight years for eFishery to "pave the way" to how sexy the fishing industry in Indonesia can be until finally attain status unicorn last year. Similar players, both those operating in aquaculture and agriculture, are making a splash because investors are starting to pay attention to them.

This is because the agriculture, forestry and fisheries industry is the third largest contributor to GDP after manufacturing and trade, with a percentage of 12,4% in 2022. Even though it is large, this industry has a multitude of problems, starting from inconsistent product quality, access to capital, price fluctuations, and supply chain.

Supported by the technological approach promoted by the startup, the upstream and downstream sides are starting to be educated with this new concept. However, this sector is not free from other challenges, especially the decline in post-pandemic demand. How can these startups sharpen their strategies to deal with this? How do investors observe the evolution of startups in this sector?

This question was discussed in the session "Are agritech & aquatech ripe for Version 2.0 to scale to next level?" at the annual Indonesia PE-VC Summit 2024 conference organized by DealStreetAsia.

This panel discussion presented four speakers: Anthony Tjajadi (Partner Trihill Capital), Aldi Adrian Hartanto (Managing Partner Ascent Venture Group), Liris Maduningtyas (Co-Founder & CEO of JALA), Witny Tanod (Co-Founder, Chief Marketing & Corporate Affairs Gokomodo).

Agritech & Aquatech 1.0

Witny said that during the 1.0 period, Gokomodo felt grateful because they had found it product market fit appropriate as an important foundation before innovating further. Gokomodo focus on procurement and delivery of agri-inputs or agricultural products and raw materials, such as fertilizers needed by agricultural actors, so that they can receive final products on time, of high quality and at reasonable prices.

“Our solution has made the supply chain more efficient and more accessible to consumers. "From various previous limitations, we have come to understand that version 1.0 of Gokomodo has provided added value," he said.

Not much different, Liris said that his party was solving problems one by one in shrimp cultivation, which is currently the company's main focus. Launching an application that can help shrimp farmers is one of the solutions offered by JALA.

"So the level of technology adoption into the aquatic industry already exists, but it still needs further penetration among farmers. The goal is that they really get the benefits. "Because technology can always overcome several problems, minimize risks, minimize supply chain costs, etc.," he said.

Drive further disruption

Both Aldi and Anthony agree that the science aspect is what matters 'beauty' must be more encouraged for the sustainability of this industry. Anthony admits that he has been involved in the agricultural industry for 30 years, but up to now there has been minimal disruption upstream.

“So improve the supply, improve the source. Maybe go back to the lab and detect, find new fertilizers, new seeds, new pesticides, or whatever. "I want more disruption and technology, and more people involved on the upstream side of the business," said Anthony.

Aldi also reminded that implementing more technology on the upstream side has a big impact on efficiency in the entire supply chain. At that time, startups need to think about how they can increase their profitability, for example by creating a new brand specifically for broiler chicken products because they have higher margins.

“But first we have to overcome supply problems. We predict the model farming-as-a-service "So it's a trend that we predict will occur," he said.

Challenges towards 2.0

Liris highlights the challenge that the talent needed to create scientific innovation in the aquaculture sector is still difficult to find. Agriculture graduates are still more interested in working in banks or as civil servants, rather than channeling their knowledge in the appropriate fields. Apart from that, there is still a need to penetrate farmers to raise their level from basic to advanced.

To keep the company efficient, JALA takes advantage of its presence big data whose sources are obtained in a cheap and efficient way, namely through applications downloaded by farmers.

"With big data, we can collect historical and current data from farmers, sampling it to make predictions and projections of their biomass without hardware. So that's the cheapest solution in my opinion. The first step for farmers in aquatech to get used to the technology.”

Witny added that partnering with the ecosystem is needed to enter the next stage 2.0, both with the government, academics, farmers, investors and startups.

“We have many programs that have received encouragement from the government itself to encourage millennial farmers. We also discuss with the government itself, when creating new products. We need to get better. "So we cannot stand alone, but everyone must support each other," he concluded.