Technology startups trying to fill the technology gap

Indonesian tech startups are raising big money in seafood farming. This should not be surprising – the archipelago has one of the world’s longest coastlines and more than 18,000 islands and islets.

But there’s another reason: A “technology gap” is preventing the industry from realizing its vast potential, according to investors and startups interviewed by CNBC.

Last year, several startups raised millions of dollars from big investors to fill this gap: eFishery ($90 million in Series C), Aruna ($8 million in Series A), Delos ($8 million in seed extension) and FishLog ($3.5 million in pre-Series A). dollars).

“Indonesia is the second largest producer of wild animals in the world after China. We are in the third place after China and India. However, if we talk about exports in value, we are in the 12th place in the world,” he said. Naufal Aslam, Founder and CEO of Aruna, a fisheries e-commerce startup. Aquaculture is the controlled production of aquatic organisms such as fish and shellfish, primarily for human consumption.

“Many decisions are made based on gut feeling or what our ancestors have been doing for the past 60 years,” says Guntur Malarang, co-founder and CEO of shrimp farm management company Delos.

And he’s not alone in thinking that.

“Indonesia’s fisheries industry has many old-style players who pass down common business practices from generation to generation,” said Yinglan Tan, managing partner and CEO of Singapore-based Incinia Ventures Partners, which invested in FishLog.

Those in Indonesia’s fisheries industry need more efficient technology and better processes, says Tan.

“The industry can only grow when the farmers grow. If the farmers don’t grow and expand their business, we won’t be able to produce more fish,” said Gibran Huzaifa Amsi El Farizi, founder and CEO of Efishery. An aquatech startup.

Efishery helps farmers optimize their processes with automated feeders and mobile apps. The automatic feeders sense the hunger of fish and shrimp by their movements, which prevents a very common problem in manual processing: over- and under-feeding.

Pharisee He started his own catfish pond in 2009 while still a student to supplement his family’s income. By the time he graduated, he was managing 76 ponds, and began exploring how to use technology to help farmers.

He then built a prototype for the automatic feeder in 2012 and launched it in 2013.

“Food costs comprise 70%-90% of the total costs. Therefore [automatic feeding] It can increase productivity and reduce costs,” Farizi said.

Aruna, meanwhile, helps connect Indonesian smallholder livestock farmers with buyers. It claims to work with 40,000 fishermen in 170 locations.

According to the Marine Policy Journal of Ocean Policy Studies, small-scale fisheries account for about 90% of the total number of fishers.

“They are still very traditional in terms of productivity and efficiency,” Aslam said.

He said farmers who worked with Aruna were able to sell up to 50% more of what they got. And according to a report by the Center for Impact Investing and Practices, Singapore Management University and Accenture, fishermen have experienced a three- to 12-fold increase in income through Aruna.

“Farmers produce what the market wants. It makes the supply chain more efficient, and the fishermen know the type of fish they are catching and the price they are selling for, so it increases their income,” Aslam said.

Although the country uses only 7.38 percent of its total area for aquaculture, according to a 2016 report by market research firm Ipsos, it is already among the most productive countries in aquaculture.

“By achieving knowledge and technology transfer of best aquaculture practices, Indonesia is well positioned to strengthen its position as one of the world’s leading water resource development countries,” the report said.

Ayush Kapoor, vice-president at Sequoia Southeast Asia – which has invested in the fishery – is also a “bully” on the industry.

“The fact that Indonesia is one of the world’s largest fish and shrimp exporters is a high margin opportunity. Also, the government supports Indonesia to become an export economy in many sectors, including water resources,” he said.

“Indonesia has the puzzle pieces to become a global leader in aquatic and seafood production. Once we figure out how to put them together, we should be able to become a seafood powerhouse in the world market,” Delos Malarangang said.