This week, we announced our investment in Semaai, a company with big plans to digitize Indonesia’s $100 billion agriculture industry. We are excited to work with the talented founding group of Abhishek Gupta, Yoga Anindito, and Gaurav Batra — and the rest of the Semaai team — to support the stakeholders in this vital sector. Semaai is Accion Venture Lab’s fourth investment in Indonesia and our sixth in Southeast Asia. Our first agritech investment in the region, the company offers a full suite of solutions to support the agriculture ecosystem.
Addressing pain points of small-scale agricultural retailers
Semaai works with small mom and pop shops that sell agricultural inputs such as fertilizers, seeds, pesticides, and other products to farmers. These retailers, locally known as toko tanis, traditionally build their inventory by bartering with numerous distributors over WhatsApp or SMS. Because of this analog and traditional sourcing process, small-scale toko tanis struggle to access fairly priced stock, direct deliveries, and product information.
That’s where Semaai comes in. The company provides toko tanis with a digital marketplace, allowing them to buy inventory from their phones without leaving their store, saving them costly downtime. These small retailers can source the products they need through an easy-to-use application with direct delivery. Semaai not only makes purchasing and receiving products simpler but also provides key data points on each product it carries, giving the toko tanis better visibility on what they purchased.
And the procurement platform is just the beginning. The company aims to solve another challenge for these small retailers — the lack of access to financing. As toko tanis build their transaction history, they will soon be able to purchase inventory on credit, freeing them from cash constraints and giving them the opportunity to grow their business.
Aiming to reach another key stakeholder — the farmer
These small retailers are just the initial customer for Semaai. As a next step, the company wants to support smallholder farmers. For this, the toko tanis move from being a customer to becoming a critical partner for Semaai. The retailers, who have deep relationships and are trusted by the farmers, will be Semaai’s ambassadors on the field. Through these retailers, Semaai will help farmers sell their produce directly to buyers. With the toko tanis serving as an extension of the company, Semaai will efficiently provide offtaking services to the farmers, giving them clear and reliable access to market at fair prices.
Closing gaps and finding opportunities in a fertile and vital industry
Indonesia’s agriculture industry is massive and vital to the country’s economy and food supply. The sector includes almost 40 million farmers and many small businesses, accounting for about 30 percent of employment. It also significantly contributes to the country’s GDP (13.5 percent). However, the agriculture industry and its stakeholders remain highly marginalized and underinvested. The farmers and all the small businesses that work with them are crucial for all of us to continue living our lives, yet we have not supported them enough. Given this, there is a need (and significant opportunity) in this industry, and Semaai wants to play a crucial role in empowering the farmers and retailers and improving their livelihoods.
Having a solid founding team with great complementary skills
Each member of Semaai’s founding team brings a different but complementary set of experience and knowledge. Abhishek sees things from 10,000 feet, with an eye on the numbers and KPIs. He understands what has worked (or not worked) in various national and local programs focused on rural area development. He has a development finance background after a career with the World Bank in the US, Indonesia, and India. Yoga is the operator and key person on the ground, with extensive experience working on the ground and seeing firsthand the pain points people face in the space. He previously ran a fertilizer distribution startup making him perfectly placed to figure out what solutions are essential and needed. Lastly, Gaurav is the tech and product head who previously led multiple tech teams for local and global startups in India and Indonesia. Gaurav has long been looking to build something of his own that is meaningful and now leads tech at Semaai.
Seizing the right moment to support the agriculture ecosystem
At Accion Venture Lab, we invest and support startups providing digital solutions and financial services to underserved people and communities. Agriculture is a key focus theme given how the sector remains underinvested and the key players highly marginalized.
While Semaai is our first foray into backing an agritech startups in Southeast Asia, it joins many other fast-growing agritech companies in our portfolio, including Pula and Apollo in Africa, AgriM and AquaExchange in South Asia, and TerraMagna in Latin America.
We have seen how Indonesia’s agriculture industry has recently started becoming more tech-enabled, with a wave of agritech startups emerging. In addition, we can see that stakeholders are increasingly going digital and younger generations are beginning to join the family business. Combining these factors with the massive market that the sector represents, we can see significant opportunities for companies like Semaai to create sustainable impact and return.
With this latest round of funding, Semaai will continue to work with toko tanis and deepen their relationship further by addressing other pain points in addition to sourcing inputs. Semaai is in the early stages of piloting a financial product for their key customers, allowing them to buy inventory on credit. The company will continue innovating and partnering with toko tanis to serve smallholder farmers.
We believe Semaai is tackling massive problems in the agriculture industry, and doing so in a carefully phased, innovative, and sustainable way. We are excited to be with the company in this early stage and see the impact they can bring to industry stakeholders, especially the toko tanis and smallholder farmers. We are proud to support their journey.