Following reports of raising new funds, Indonesian aquaculture startup eFishery announced today that it has raised $200 million in a Series D. The company, which makes a smart feeding system for fisheries, says it becomes the first startup in the global aquaculture industry to pass a $1 billion valuation. The goal is to reach one million aquaculture ponds in Indonesia by 2025 and expand abroad.
The financing was led by Abu Dhabi-based 42XFund and included the participation of Kumpulan Wang Persaraan (Diperbadankan), Malaysia’s largest public sector pension fund, Swiss wealth manager responsAbility and 500 Global. Existing investors Northstar, Temasek and SoftBank also returned to the round, with Goldman Sachs acting as exclusive financial advisor to eFishery. TechCrunch last reported on the startup when it announced its $90 million Series C in January 2022.
EFishery cites a study by the Demographic Institute of the University of Indonesia (LDUI) showing that eFishery contributed 1.55% to Indonesia’s gross domestic product in the aquaculture sector in 2022. This is significant as Indonesia has the second largest fishing and aquaculture industry in the world, behind only China. According to the World Atlas, the country produces 5.8 million tons of fish every year.
The fishery was founded in 2013 by CEO Gibran Huzaifah (pictured above) in Bandung, West Java and currently serves 70,000 fish and shrimp farmers in 280 cities across Indonesia. In addition to its IoT automated feeding system, eFishery’s platform includes marketplaces for selling fish and shrimp feed to farmers, fresh fish and shrimp products to B2B consumers, and financial products for fish farmers.
Huzaifah founded a catfish farm while he was still studying. He told TechCrunch that during that time he’s learned that feed management is vital, as 80% of total production costs go to feeding. However, many farmers still feed by hand, resulting in uneven fish sizes as not all receive the same amount of feed.
This is a problem as buyers want to buy specific fish sizes. However, underfeeding is not the only problem – overfeeding leads to the leakage of nutrients that pollute the water.
Huzaifah saw the technology revolutionizing sectors like commerce, financial services and media, but “the practice of fish farming hasn’t changed much in the last 30 years.” I found it quite ironic that many innovations are being developed to solve problems for city dwellers , such as online shopping and grocery delivery, while there is almost no digital innovation in essential sectors such as agriculture and aquaculture.”
However, after developing eFishery’s intelligent feeding system, Huzaifah faced resistance from fish farmers. After months of convincing them, “they finally wanted to try it, not because they believed in the technology, but because they felt sorry for me.” One reason was that many farmers weren’t regular internet users. “I remember we had this internet emergency call with the farmers,” Huzaifah said. “We showed them how to create an email, use Facebook, get information from YouTube and much more.”
Although Indonesia’s aquaculture is already very large, it has only reached 7 to 9% of its total potential, according to Huzaifah. Among the challenges it faces is fragmentation. Huzaifah explains that Indonesia has 34 provinces with different business practices and therefore needs to localize each one.
“I learned the hard way that we need to respect local actors, including using the local dialect and building relationships with the middlemen,” he said. “In one case, some middlemen poisoned our ponds. After talking to them, we understood that they just want to do business, that they are also entrepreneurs. So we found a way to make them our local partners because they have the knowledge, the connections, the resources, etc. locally.”
On farms, feeding accounts for 70-90% of total production costs and much of this is still done manually, just as it was when Huzaifah ran his catfish farm. eFisheryFeeder automatically distributes feed to fish and shrimp and helps farmers control feed by detecting fish’s appetite through vibrations that increase when they get hungry. The system allows farmers to manage ponds via their smartphone and collect data such as daily fish consumption, type and brand of feed, number of fish produced, fish behavior and appetite, stocking density and mortality rate.
Because aquaculture is so important to the Indonesian economy, other tech startups are looking at other aspects of the industry. In addition to eFishery, startups that have recently raised funding include Aruna, Delos and FishLog.
In order to improve Indonesia’s aquaculture industry and increase the amount of fish exported, communities, government and institutions must work together to improve fisheries infrastructure, Hazaifah said.
The country should promote sustainable aquaculture practices such as training, promote advanced techniques and ensure access to quality fish seed to increase fish production, and also engage in trade negotiations to attract more buyers. Efishery plans to expand overseas by exporting fully traceable, antibiotic-free shrimp.
In a statement on the funding, 42XFund Director Iman Adiwibowo said, “The technology and comprehensive aquaculture solutions provided by eFishery have had a significant impact on the aquatech industry and have benefited smallholder farmers in Indonesia.” We are confident that eFishery will continue to build a sustainable and inclusive economy and will contribute to environmental protection goals not only in Indonesia but beyond.”