Pasarnow scores $3.3m seed funding to upgrade Indonesia’s fresh food supply chain

E-grocery platform Pasarnow has raised $3.3 million in funding as it seeks to upgrade Indonesia’s highly fragmented, and often inefficient, supply chain for fresh produce.

Jakarta-based VC East Ventures led the round, with Amand Ventures, Prasetia Dwidharma, Skystar Capital, SMDV, and several angel investors also participating.

Pasarnow, which currently operates in the cities of Jakarta and Bandung, will use the funding to expand its presence to more regions of Indonesia.

The capital will also go towards new hires, as well as enhancing tech and data capabilities in line with the startup’s vision “to be the first multi-channel e-groceries platform in Indonesia.”

Launched in 2019, Pasarnow’s platform allows both enterprise customers and end consumers to purchase fresh groceries. It works with over 1,000 farmers and other food suppliers to source fruits, vegetables, and meat.

“Having a multi-channel platform helps us in achieving faster economies of scale and in creating a greater efficiency in our operations,” co-founder and CEO James Rijanto said in a statement.

Users can order produce through Pasarnow’s mobile app, which provides a “unique customer experience” with different pricing and promotions dependent on whether the buyer is from the B2B or B2C channel.

The startup then aggregates all B2B and B2C orders together, enabling it to forecast demand for its farmer partners. This helps the farmers to optimize their planning around harvesting and logistics, while also reducing food waste as their produce passes through the supply chain.

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“Ensuring product freshness when it reaches the customers is supremely challenging. Food products like fruits, vegetables, and frozen meat are highly sensitive and perishable, so it requires fast and temperature-controlled delivery, which causes expensive logistics costs,” Rijanto said.

That explains the other important piece of Pasarnow’s offering: its logistical infrastructure, which introduces further efficiencies into the supply chain through micro-fulfillment, refrigeration, and last-mile, ‘in-time’ delivery. The startup has established a network of micro-warehouses which it calls ‘Frontline Mini Hubs’. These are kitted out with cold-storage equipment for both fresh and frozen foods, and are typically located in or near the most densely populated urban areas – putting them as close to customers as possible to enable express delivery and keep produce as fresh as possible.

Pasarnow already operates 10 of these Frontline Mini Hubs across the Greater Jakarta region, and plans to add more following its seed round.

Indonesia’s e-grocery market was worth $1.2 billion in 2019 – but is projected to balloon to $13 billion in value by 2025, according to research firm RedSeer. Pasarnow claims that, since the onset of the Covid-19 pandemic in early 2020, it has been seen a 400% increase in B2C orders, while monthly revenues have doubled.

“The changing shopping behavior of consumers due to the Covid-19 pandemic has brought about another challenge in the grocery industry – customers demand fresh and high-quality produce on a daily basis amidst the complex grocery supply chain,” Willson Cuaca, managing partner at East Ventures, said in a statement.

“Pasarnow comes to tackle the challenge, eliminating inefficiencies in the process through its data-driven business model. With its robust growth in the past year, we believe that the Pasarnow team can accelerate its capacity-building and scale up their business.”