What difference will this investment make?
AgriAku’s ultimate goal is to give small-scale farmers, in Indonesia and beyond, access to a full suite of services – from financing to soil testing to machinery hire – that can increase earnings and yields.
At this stage however, AgriAku’s founders are focused on connecting farm stores with companies selling agricultural supplies such as seeds and fertilizers.
Local stores often have long-standing relationships with farmers, providing loans and advice that can evolve into digital services in the future, explains AgriAku’s president, Irvan Kolonas.
“If we can make the farm retailer more successful, those savings will pass on to the farmers, especially as we do other sorts of products and services for farmers in the future,” he tells Tech For Impact.
So far, between 10,000 to 20,000 retailers and hundreds of suppliers are using AgriAku’s mobile and web-based applications. The latest funding round will help ramp up marketing and product development.
“We will be doing other products for farmers in the future.”
Over the next six months, the startup aims to double the size of its field marketing team while building new financing, logistics and fulfillment features to attract and retain customers.
An app for farmers should launch by the end of the year, followed by a marketplace where farmers can sell their crops and produce.
There are thought to be between 250,000 and 300,000 village-based agri-stores in Indonesia, usually serving about 150 to 300 famers each.
AgriAku is working to get most of them on its platform within two years, to create a stronger and healthier market for agricultural products and services.
“Everybody wants to be a full stack digital platform,” Irvan says. “Where we differ is – because of our deep understanding of the industry – how we started. I think it’s more unique than the other players.”
Why are investors backing AgriAku?
“We back the team that we think will be the most successful in a given segment or industry,” explains Aditya Kamath, a partner at Go-Ventures, the early-stage VC firm that led AgriAku’s pre-Series A round.
Between them, AgriAku’s senior team combines agri know-how with experience in product and tech, especially in building online marketplaces. “The team is perfectly situated to take advantage of a very large and to date under-exploited market opportunity,” Kamath says.
One key impact metric is net farmer earnings. This should improve as market efficiencies and price transparency lower the prices of supplies.
In time, new services will help boost productivity while wider market access gives farmers more pricing power.
“That’s the long-term vision and strategy,” Kamath says. “We’re very early in achieving that. But those are the goals we have.”
Increasingly, Go-Ventures is paying more attention to undigitized parts of the economy, after initially focusing on consumer internet opportunities.
“Technology is a great enabler of change,” Kamath says. “We love to see businesses that are actually helping the mass market and the poor, improving their livelihoods while building large and sustainable businesses at the same time.”
Funds from Telkom-backed MDI Ventures, including an existing investor from AgriAku’s seed financing round, also took part in AgriAku’s pre-Series A, alongside Mercy Corps Ventures, the impact investing arm for the global aid agency, and several business angels.