Indonesia’s business-to-business market platform for farmers AgriAku has secured US$35 million in a Series A funding round led by Alpha JWC Ventures as it looks to expand its team and product range.
Existing backers Go-Ventures and MDI Ventures also joined the round, along with new investors such as BRI Ventures, Mandiri Capital Indonesia (MCI), K3, Thai Wah Ventures and Alto Partners.
“I’m a big believer in teamwork, so a lot of (the funding) will go towards ramping up our team. Also, having the right products is important. We fundamentally believe that better products would allow customers and merchants to transact more seamlessly. So, we are also set to pilot a few projects,” Irvan Kolonas, president at AgriAku told DealStreetAsia in an interview. “We want to move to output as well, to complete our vision.”
Different from other agriculture technology companies such as TaniHub and farm-to-table e-commerce startup Sayurbox, AgriAku currently trades goods used in the production side of agriculture, including fertiliser, seeds and other tools needed by farmers.
With the new funding, AgriAku is looking to branch out to the “output” side of the business, meaning to trade farmers’ crop yields. Going forward, the startup also has plans to offer financial products.
“We believe one day, maybe in the next 10 years, we can sell seeds or fertiliser directly to farmers, but the reality today is many farmers are not yet digital-friendly,” Kolonas said. “What we should do instead is to partner with farm shops.”
Kolonas was referring to local shops known as toko tani where farmers buy equipment, seeds and other agricultural needs. The startup currently connects producers, distributors and wholesalers to over 20,000 toko tani shops across Java, Lampung and South Sulawesi.
The game play of any B2B business is never far from offering logistics, financing and marketing services — a blueprint that AgriAku follows as well, he said adding that in the long run, the startup plans to offer finance products to its customers in cooperation with lenders.
“Most likely what we will be doing is working with banks to channel their loans directly to toko tani through our apps,” he said, noting that the actual program is likely to run in 2023.
AgriAku counts agritech companies Semaai and Gokomodo among its competitors. In total, the startup has amassed around US$42 million in the 14 months since its inception in May 2021.
Kolonas, who has a decade of experience in the agricultural tech sector, built AgriAku with co-founder and CEO Danny Handoko, who previously was the co-founder and CEO of the travel startup Airy.
The agritech sector in Indonesia has attracted a lot of investor interest, as highlighted by DealStreetAsia’s weekly newsletter Vantage Point. Sayurbox raised more than US$120 million in an oversubscribed Series C funding round in March. Meanwhile, Eden Farm announced a US$19 million Series A round in November last year and was reportedly raising another round immediately after.