Ag marketplace startup TaniHub Group has raised $65.5 million in a Series B round led by MDI Ventures, the corporate VC arm of Indonesian telecom giant Telkom.
A bevy of new and existing investors also took part in the round, including AddVentures — the corporate VC arm of Thai conglomerate SCG — along with UOB Venture Management, BRI Ventures, Flourish Ventures, Intudo Ventures, Openspace Ventures, Tenaya Capital, and Temasek affiliate Vertex Ventures.
“TaniHub Group aspires to narrow the gap between the prices that Indonesia’s 40 million small farmers receive for their produce, and the price that consumers pay for the same food,” co-founder and CEO Pamitra Wineka said in a statement.
He added that the Jakarta-based startup will use the Series B funds to strengthen its presence “in every region of the country, to ensure close proximity with farmers and communities” and “help increase the competitiveness of Indonesia’s agricultural sector.”
This will include a ramping-up of harvest collection activities and enhancement of processing capabilities, with the aim of boosting exports for Indonesian agricultural goods.
Founded in 2015, TaniHub Group offers a variety of services to Indonesia’s smallholder farmers — who comprise a substantial chunk of the island nation’s economic activity — and millions of other micro-entrepreneurs seeking to purchase farm porduce for their own businesses, including small-scale retailers, caterers, restaurants, and street food vendors.
The group’s e-commerce platform, TaniHub, links farmers directly to these buyers, cutting costs by avoiding traditional middlemen.
It also has a logistics service called TaniSupply, which handles the movement of farm produce from farm to warehouse and on to end buyers. It operates six warehousing and processing facilities located across Indonesia, and aims for a “shorter supply chain and better handling” of fruits and vegetables in order to reduce food waste and emissions.
The third pillar of the business is farmer fintech platform TaniFund, which leverages the startup’s extensive dataset to credit score farmers and extend cultivation loans to them, which can they can pay off as their produce is sold via TaniHub.
Despite Covid-19, TaniHub Group said its gross revenue grew by over 600% year-on-year in 2020. Its last announced funding was a $17 million Series ‘A-plus’ round in April 2020, just as the pandemic struck Southeast Asia. This followed a $10 million Series A raise the previous May.
“TaniHub Group’s business model is a unique combination of sourcing network, demand aggregation, and embedded finance that is a win-win proposition for all stakeholders – including small farmers, street vendors, small business owners, and household consumers,” said Smita Aggarwal, global investments advisor at Flourish Ventures, in a statement.
“[It] offers a compelling solution to the issues that Indonesia’s fragmented agricultural sector faces, enabling market linkages as well as access to financing for farmers.”
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