Indonesia’s aquaculture industry rises to the helm amid farmer decline

As seasoned firms like eFishery continue to grow bigger, even making plans to explore new waters, Indonesia’s aquaculture industry is also seeing the entry of younger players like Delos and Crustea.

Significantly, this also comes at a time when the number of independent Indonesian aquaculture farmers are steadily declining.

Poised to reach a global market size of US$421.2 billion by 2030, the aquaculture or aquatic farming industry involves the production of fish, as well as shellfish, algae, and other organisms in all types of marine environments.

According to the OECD, Indonesia is the world’s second-largest aquaculture producer with a total output of 14.8 million tons in 2020, equivalent to 13.2% of global production.

The country is second only to China, which produces 70.5 million tons and accounts for 62.8% of global production according to the OECD.

However, Indonesia has a longer coastline compared to China – which indicates that better utilization of land for aquaculture can be better optimized to increase its total production potential: The archipelago can contribute up to 150.5 million of aquaculture output, around 10x more than it does now.

Despite this prospect, Guntur Mallarangeng, CEO of local aquaculture startup Delos, says that firms have only tapped into 7.38% of the country’s aquaculture potential.

“There is still so much that can be done,” he tells Tech in Asia.

Although there was a decline in 2020 due to the COVID-19 pandemic, the average consumption of aquaculture products in Indonesia has shown an upward trend in the past five years.

Big fish in a small pond?

With promising potential, several aquaculture startups are implementing at least five business models to capture the current market:

1. Marketplace: connecting buyers and sellers as well as directly selling products from farmers.
2. Use of tech to increase fishery productivity, reduce operational costs: IoT-based smart feeders being an example.
3. Inventory and operational management: providing supply chain services like cold storage warehouses and water quality management.
4. Access to financing: including peer-to-peer lending or crowdfunding platforms that connect investors with fish farmers.
5. Education and consultation: providing knowledge, skills, and guidance to farmers and fishers to improve productivity.

According to Tech in Asia’s data, the disclosed funding for aquaculture startups in Indonesia increased threefold in 2022, reaching US$131.5 million (IDR 1.9 trillion) compared to 2021. EFishery secured the largest deal, which was US$90 million (IDR 1.3 trillion) in a series C funding round.

EFishery also recently raised its US$108 million series D in May of this year.

Gibran Huzaifah, CEO and Co-founder of eFishery / Photo credit: eFishery

Room for more fish in the sea

Challenges ahoy