The green pastures of SEA’s agritech landscape

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Hi there,

As a child, I recall my grandfather haggling with a large man wearing a thick gold bracelet over the selling price of a crop of coconuts that had recently been harvested from our farm in south India. I was worried as this man was nearly twice the size of my grandfather – I remember thinking that he could easily beat my elderly grandfather to a pulp.

The large man was an agricultural distributor – commonly known as a middleman – who bought crops from smallholder farmers like my grandfather. The heated negotiations ended with the harvest being sold for one-tenth of the price the coconuts would fetch in the market. My grandfather was in a foul mood for the rest of the day.

Similar to India, Indonesia’s agricultural supply chain is riddled with middlemen. There are up to 13 layers of middlemen in the country with each taking a 10% to 20% cut, leaving farmers with the lowest income in exchange for the greatest effort.

This large gap between farmer and end-consumer is one reason for the rise in agritech startups in Indonesia. The archipelago has more agritech firms than all other nations in Southeast Asia combined, my colleague Shadine reports in this edition’s Big Story.

The story highlights the extensive players in the region’s agritech space. The industry has definitely caught the attention of investors – they pumped in over 2.5x more funding in agritech startups last year compared to 2021. The number of deals have also doubled over the past year.

Speaking of investor attention, SoGal Ventures co-founder and managing partner Pocket Sun tells my colleague Melissa why investing in minority- and female-founded startups makes good business sense. And she’s walking the walk – 95% of the startups in SoGal Ventures’ first fund have at least one female co-founder and eight of its investments raised “up” rounds in 2022.

In this week’s AI Odyssey, I showcase a generative AI firm that is looking to build a sustainable business model by targeting enterprise customers. More on that later, but first, our Big Story.

— Collin

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THE BIG STORY

The key players in SEA’s agritech space

The region’s agritech industry attracted over 2.5x more investment with funding deals in the sector reaching an all-time high in 2022.

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MAKING WAVES

Investing in women founders is good business, says diversity-focused SoGal Ventures

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AI ODYSSEY

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FYI

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NEWS YOU SHOULD KNOW

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