Indonesian chicken startup’s 20x revenue jump sees it take off

Arief Witjaksono, a serial entrepreneur from Indonesia, tried to enter the country’s poultry business by building his own chicken farm in 2018. However, he soon became aware that the industry’s lack of transparency could dampen the trust of farm owners.

“At one instance, there was a poultry broker that promised to distribute my chickens. But after I gave the chickens, he just ran away [without paying me],” Witjaksono recalls.

However, poultry is a promising industry in Indonesia, where chicken consumption is expected to grow by a further 13.5% to reach 9.3 kilograms per capita by 2029 from 8.2 kilograms per capita in 2022. The archipelago’s 270 million people can consume more than 2.2 billion tonnes of chicken meat a year.

Pitik co-founders Arief Witjaksono (left) and Rymax Joehana / Photo credit: Pitik

Witjaksono, along with his friend, Rymax Joehana, an ex-Boston Consulting Group consultant, decided to build a solution to help farmers produce more and do business more efficiently. In 2019, the pair established a poultry startup called Pitik.

Pitik’s main revenue driver is selling chicken feed to smallholder farmers and buying back the chicken when they’re ready to be harvested – which takes around 35 days. The company then distributes those live chickens directly to wholesalers and wet markets.

The poultry firm said it made US$12.2 million in revenue in October 2022 – a 20x growth from the US$600,000 it made in the same month a year earlier, as per a recent presentation seen by Tech in Asia. However, the firm declined to confirm these numbers.

Leader of the coop?

Those figures represent a huge revenue spurt for a startup in a year. Pitik told Tech in Asia that it has also registered a positive contribution margin – total sales after deducting variable costs. The company made a marginal operating loss of about US$400,000 in 2021, as per VentureCap Insight (VCI) data.

That said, the firm’s revenue is still far lower than the earnings of publicly listed poultry firms like Charoen Pokphand Indonesia (CPI), the country’s largest poultry-feed and processed-chicken producer. The subsidiary of Thailand-based conglomerate Charoen Pokphand can make US$150 million in average monthly revenue from broiler sales.

Farm for growing broiler chickens / Image credit: 123RF

The Alpha JWC Ventures-backed Pitik says it sells 4 million chickens on average from farmers to wholesalers every month. In comparison, Chickin, an East Ventures-backed poultry firm in Indonesia, says it sells 3 million chickens per month and that it had made an operating profit at the end of 2022.

BroilerX, another Indonesian poultry startup, tells Tech in Asia that it has distributed 1 million live chickens in four months. Both Chickin and BroilerX were founded in 2020 – a year after Pitik.

The three startups still focus on Java Island, leading to unavoidable competition. However, Witjaksono says the market is huge, considering there are hundreds of thousands of small chicken farmers in the country.

Demand is tricky

Tech to build loyalty