This firm goes against the grain by backing agriculture traders

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Hello reader,

I’ve had a host of creative insults hurled at me in different languages, especially in the early part of my career as a sports reporter (people are a lot more passionate about that than finance). I like to believe it’s just a journalist thing – we aren’t exactly the most popular folk around the block.

While none of that makes it OK, I am still relieved that my colleagues and I aren’t commonly regarded as margin-grabbing “parasites” – a barb sometimes directed at the middlemen (also called traders) in Indonesia’s agriculture ecosystem.

These intermediaries are often typecast as the villains of the supply chain. This is partly because the successful aggregator business model has thrived by not only eliminating the need for but also highlighting the deficiencies of these brokers’ services.

However, PasarMikro, a startup that facilitates upstream agricultural trade, has opted to take a different approach. The Indonesia-based firm places these go-betweens at the front and center of its business, acknowledging the key role they play in the archipelago’s well-established agriculture system.

Now, armed with US$2.5 million in seed funding, the company hopes to leverage these traders’ knowledge, network, and expertise in a bid to take the Southeast Asian nation’s agritech market by storm.

Today we look at:

• The seed round and future plans of PasarMikro
• MoneySmart set to grace the public stage
• Other newsy highlights such as tech giants such as Stripe, Twitter, and Meta succumbing to layoff fever

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In the middle

Image credit: Timmy Loen

PasarMikro has no plans of driving Indonesia’s traders out of the supply chain, but it has instead tied its growth with the success of these intermediaries.

The firm’s priority is to grow its main product offering – a platform that enables transactions between farmers and traders. PasarMikro tackles the uncertainties and delays of these transactions by making payments to farmers on behalf of traders and then allowing traders to pay for the goods in three, seven, or 14 days.

• Plan of action: After raising US$2.5 million in seed funding, the two-year-old company will use the fresh capital to roll out new products, including a marketplace function for sellers and buyers.
• Adding another layer? PasarMikro hopes that this marketplace feature will help it reach its target of US$300 million in annualized gross transaction value and 10,000 users by the end of 2023. The marketplace’s first phase of development will offer a ratings function for sellers based on reputation and transactions, and buyers can negotiate and transact with their seller of choice.
• More than meets the eye: The startup has other features for its users. For instance, it fulfills an escrow role for brokers that have the money to pay farmers. Further, PasarMikro offers a ledger system on its app, which helps traders manage receivables and payables, invoices, and purchase orders.

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