Deal focus: TaniGroup plants a seed for Indonesia agtech

Indonesia’s technology sector has made impressive strides in recent years, but agriculture remains the backbone of the national economy. Nearly a third of the population worked in the sector in 2017, according to the Central Statistics Agency, and the World Bank reported a year earlier that food accounted for 22.5% of the country’s exports.

Yet despite their economic importance, Indonesia’s farmers suffer from an acute imbalance of power. Agriculture is dominated by small landowners, often working in barely better than subsistence conditions. “Farmers are often taken advantage of – there’s agents and multiple intermediaries who will only give purchase orders when they think the situation is right for them,” says Shane Chesson, a co-founder of Openspace Ventures. “Farmers don’t really have access to all the same information, so they have to go with intermediaries who don’t have their interests in mind.”

By 2016, Indonesian entrepreneur Pamitra Wineka had come to see these conditions as unacceptable, and he quit his job as a researcher at the World Bank to help level the playing field. Now his start-up TaniGroup has secured a $10 million Series A round from Openspace, Golden Gate Ventures, Intudo Ventures, and DFS Lab to build a powerful ally for agriculture workers in the country.

TaniGroup was born out of a desire to correct information disparity, and its first product, the online fresh produce marketplace TaniHub, reflects this ambition by giving farmers a place to sell their products directly to small and medium enterprises rather than through established channels. However, the investors see TaniHub as the first part of a larger platform to which additional services can be added.

The first of these, peer-to-peer lending platform TaniFund, launched in 2017 and leverages customer data collected through TaniHub to help with credit assessment. TaniFund is intended to give farmers the financial flexibility they need to build their businesses.

“One of the issues created when farmers don’t have enough certainty and live day-to-day is they can’t properly plan and invest,” says Chesson. “You need to provide the financing to make them feel more confident about the platform and build an environment of trust, because that’s the biggest thing that’s been lacking in this industry.”

Currently, TaniGroup has about 25,000 farmers on its platform, a tiny fraction of an addressable market that is expected to grow as smart phones penetrate rural communities. The company hopes to scale quickly on the back of its positive feedback to date.

“We’ve been hearing success stories of people who’ve expanded production capacity or moved into new segments through the certainty of transactions as well as through the financing channels that we’ve opened up,” Chesson says. “We also have good relationships with the regulators and we’ve got the relevant P2P licenses, which will help us get to bigger scale.”   

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• Topics
• Southeast Asia
• Technology
• Industrials
• Early-stage
• Indonesia
• Openspace Ventures
• Golden Gate Ventures
• Intudo
• TMT
• Agriculture