Y Combinator-backed agritech raises $19m to build financing products

Early 2020 was a pivotal time for Indonesia-based agritech startup Eden Farm. The Covid-19 pandemic started to spread in the country, disrupting the stability of national business and drying up investments into startups.

“At that time, we decided that the company must survive, even without additional fundraising,” Eden Farm CEO David Gunawan told Tech in Asia.

He decided to drastically change a majority of the offerings that were sold on the platform. Instead of dry goods such as rice and cooking oil, the company began to focus on fresh products, which would give it better margins. Because of this change, the company wasn’t able to serve many of its existing customers, and it also laid off around 200 people who focused on the dry goods segment.

Eden Farm executives (from left) Oki Harmawan, Ramavito Mountaino, David Gunawan, Christo Okulian, Febrianto Gamal, and James / Photo credit: Eden Farm

While it changed its offerings, the company stuck to its core strength in the business-to-business (B2B) sector despite the temptation of entering the business-to-consumer (B2C) market, which was becoming a more popular industry in the country. Gunawan said that the B2C market is not suited to Eden Farm’s supply chain network, so he has no plans of entering the space in the near future.

“In my perspective, if a company wants to build a deep supply chain that reaches farmers, B2B is a better model. It can give us a more consistent demand, which makes it easier for us to control the supply from farmers,” he explained.

This decision turned out to be fruitful. The Y Combinator-backed company grew its revenue by 4x in 2020 compared to the previous year. It expects a 5x annual revenue growth by the end of this year.

Recently, it raised US$19 million in a series A round co-led by AppWorks and AC Ventures, with the participation of Trihill Capital, OCBC Ventures, Investible, Corin Capital, and existing investor Global Founders Capital.

The deal boosts Eden Farm’s total amount raised to date to around US$20.7 million.

Near zero waste

Eden Farm was founded by Gunawan with his college friends Ramavito Mountaino and Febrianto Gamal in 2017. Since the beginning, it has focused on the B2B market, connecting several sources of fresh produce with micro, small, and medium-sized enterprises (MSMEs) that need these products on a regular basis.

Interestingly, the company doesn’t depend on a single kind of entity for both the supply and demand sides. Besides farmers, it also engages with mid-size retailers and even importers to maintain consistency of supply regarding quality and delivery.

On the other hand, Eden Farm also has various kinds of MSMEs, small retailers, and food processors as customers to absorb all of its products. The company even has a place where it can sell low-quality produce.

“The network allows us to reduce our waste to near zero and improve our profitability,” Gunawan said.