About 29% of the Indonesian labor force works in the agricultural sectorbut many small farmers face challenges such as limited access to working capital. Eratani is an end-to-end management system that helps them obtain financing and supplies, then helps them sell crops as soon as they are ready. The startup announced today that it has raised an oversubscribed $3.8 million seed round led by Singaporean VC firm TNB Aura, with participation from AgFunder, Trihill Capital and BIG Ventures.
Founded in 2021 by Andrew Soeherman, Kevin Laksono and Angles Gani, Eratani is now used by more than 10,000 farmers in Java to manage a total of 8,000 hectares and produce 52,000 tons of rice. The goal is to work with more than 50,000 farmers by the end of 2024.
Soeherman’s uncle ran a farming supplies business, which gave him a glimpse into the difficulties farmers faced growing up. He told australiabusinessblog.com that most agritech players serve the downstream needs of farmers, so Eratani was originally developed to solve upstream problems before turning into an end-to-end management platform for farms and goods throughout the production cycle.
Some of the challenges faced by Indonesian farmers include having to borrow money to buy agricultural commodities from stores. They pay off those loans after they sell their crops, but the interest is about 20% a month, Soeherman said, meaning they’re trapped in a cycle of debt. “In Indonesia there are 33 million farmers and the majority are over 45 years old. If nothing changes, Indonesia will face a regeneration crisis of farmers within 10 years.”
Eratani’s management platform is divided into three parts. The first, agro-finance, gives farmers access to the working capital they need for the planting process. Agri Inputs provides farming supplies with usage recommendations from its teams of agronomists. Finally, Agri Output is a market price system for use during the crop distribution process.
Eratani also collects field data statistics to increase farmer productivity. Through the platform, farmers have access to Eratani’s agronomists who can help them with strategies to increase their crop yields.
The startup currently has several partnerships with the Indonesian government. This includes a partnership with the Ministry of Agriculture of Indonesia and the Indonesian State Logistics Agency to develop the agricultural ecosystem, aiming to achieve food independence in Indonesia, and another with the Ministry of Agriculture of Indonesia to improve crop yields and income of the raise farmers. It is also part of Startup Studio Indonesia of the Ministry of Communications and Informatics.
Agritech startups are growing in Indonesia and some covered by australiabusinessblog.com include B2B marketplace AgriAku, agritech platform TaniHub, and “sea-to-table” startup Aruna.
Suherman said Eratani differentiates itself by creating an ecosystem for the whole farming process, but he doesn’t see other players as competitors. “In the agritech industry, we believe the whole community should come together to support and encourage the Indonesian agricultural sector. Despite more than 70 agritech companies operating in the space, there is still a long way to go as only 3% of Indonesian farmers in general are estimated to have benefited from these technologies.”
In a statement, TNB founder Vicknesh R. Pillay said: “The agritech space in Indonesia has reached a turning point due to its current fragmented nature. Eratani has brought forward a farmer-centric approach, along with a strong team and existing partnerships in the space, and we are excited to begin this journey with Eratani.”