Tech startups are trying to fill the technology gap

Indonesian tech startups are making big bucks in seafood farming. This should come as no surprise – the archipelago is home to one of the world’s longest coastlines and more than 18,000 islands and islets.

But there’s another reason: According to investors and startups CNBC spoke with, a “technology divide” is holding the industry back from realizing its vast potential.

Last year, several startups raised millions of dollars from large investors to bridge the gap: eFishery ($90 million in Series C), Aruna ($30 million in Series A follow-on), Delos ($8 million in seed development) and FishLog ($3.5 million in pre-Series A).

“Indonesia is the second producer of wild fish in the world after China. We are third in aquaculture production after China and India. But if we talk about export value, we are only 12th in the world,” Farid said. Nafal Aslam, co-founder and CEO of Aruna, a fisheries e-commerce startup. Aquaculture is the controlled cultivation of aquatic organisms such as fish and shellfish, especially for human consumption.

Guntur Mallarangeng, co-founder and CEO of Delos Shrimp Farm Management Company, says, “A lot of decisions are made based on gut feeling or what the ancestors have done over the past 60 years.

And he is not alone in this thought.

Yinglan Tan, founding partner and CEO of Singapore-based Insignia Ventures Partners, which invested in FishLog, said: “The Indonesian fishing industry has many old players who have passed down conventional business practices from one generation to the next.

According to Tan, those working in Indonesia’s fishing industry need more efficient technology and better processes.

“The only way the industry can grow is if the farmers grow. If the farmers don’t grow and expand their businesses, we really can’t produce more fish,” said Gibran Huzaifah Emsi Al-Farizi, founder and CEO of eFishery. An aquatech startup

eFishery helps farmers optimize their processes through automated feeders and mobile apps. Automatic feeders detect the level of hunger of fish and shrimp through their movements, which avoids a common problem with the manual process: over- and under-feeding.

Freeze In 2009, he started his own catfish pond while still a student to supplement his family’s income. By the time he graduated, he was managing 76 ponds and began exploring how he could use technology to help farmers.

Then, in 2012, he made the prototype of the automatic feeder and released it to the market in 2013.

“Feeding costs account for 70 to 90 percent of total costs [automatic feeding] Saying that it can increase productivity and reduce costs, Farizi said: Automatic feeders can reduce feeding costs by 28%.

Aruna, in turn, helps connect Indonesian small-scale fishermen with buyers. The company claims to work with 40,000 fishermen in 170 locations.

According to the Marine Policy Journal of Ocean Policy Studies, small-scale fishing accounts for about 90% of the total number of fishers.

“They are still very traditional in terms of efficiency and productivity,” said Aslam.

He claimed that the farmers who worked with Aruna were able to sell their catch up to 50% more. And according to a report by the Center for Investment and Impact Methods, Singapore Management University and Accenture, fishermen have achieved a 3-12 times increase in income through Aruna.

“Farmers will produce what the market needs. This will make the supply chain more efficient and increase fishermen’s income because they will know what fish to catch and what they can get at a higher price,” Aslam said. to sell.”

Although the country uses only 7.38% of its total potential area for aquaculture, it is currently ranked among the most productive countries in aquaculture production, according to a 2016 report by market research firm Ipsos.

“With the right knowledge and technology transfer of best aquaculture practices, Indonesia is well positioned to cement its position as one of the top aquaculture nations in the world,” the report said.

Akash Kapoor, vice president of Sequoia Southeast Asia – which has invested in eFishery – is also “bullish” on the industry.

“Indonesia, being one of the world’s largest fish and shrimp exporters, is certainly a higher margin opportunity. And the government is also supporting Indonesia’s transformation into an export economy in many sectors, including aquaculture,” he said.

Delos’ Mallarangeng said, “Indonesia has the pieces of the puzzle to become a global leader in aquaculture and seafood production. Once we figure out how to put them together, we should be able to become a seafood powerhouse in the global market. “