After enjoying a threefold increase in revenue last year, Indonesian aquaculture IoT startup eFishery is casting its nets overseas, beginning with Thailand. The commercial rollout is well underway in its new market, where eFishery’s products will be launched in early 2022, CEO and co-founder Gibran Huzaifah said.
“We aim to penetrate markets in 10 countries by 2025, starting with Thailand, followed by Vietnam and Bangladesh,” Huzaifah told CompassList in an interview via email. These countries have similar landscapes and market conditions to Indonesia, he added. “We are actively forming partnerships with local companies so that our expansion plans can run smoothly.”
Founded in 2013, eFishery, started off by making automatic feeders for fish and shrimp farms. The feeders help farmers to better control the amount of feed used, reducing feed costs and preventing contamination of the aquaculture pools. Over 20,000 fish and shrimp farmers in Indonesia have increased their production capacity by 26% by using the eFishery products, the company said.
Huzaifah said the business has been “EBITDA-positive” over the past three years, and is looking to reach 1m users over the next three to five years through local and regional expansion efforts. In August 2020, eFishery secured Series B funding from Northstar Group, GoVentures (Gojek’s VC arm), Aqua-Spark, Endeavor Catalyst and Wavemaker Partners. Aqua-Spark and Wavemaker also participated in earlier funding rounds worth $5.2m.
During the Covid-19 pandemic, eFishery boosted its revenue by “optimizing our other business verticals besides eFisheryFeeder [the automatic feeder product],” Huzaifah said. These verticals include marketplace eFisheryFresh for fish sales; eFisheryFeed that helps farmers buy feed at more affordable prices; and eFisheryFund services to connect farmers with financial institutions offering business loans.
“We saw that many fish farmers were facing difficulties in getting business financing and selling their harvests [during Covid], as well as getting feed from retailers,” he said.
So far, eFisheryFresh has distributed more than 5,000 tons of fish from farmers to buyers in the B2B and B2C markets. “The growth in sales was driven by rising awareness of the importance of nutritious and healthy food, which led to an increase in fish sales,” Huzaifah said.
Moving forward, the company will focus on the B2B market now that businesses like hotels and restaurants are reopening and ramping up operations. eFishery also plans to export shrimp harvests to buyers in the Middle East and the US.
By offering group-buying services, eFisheryFeed is able to bring down feed costs for farmers. The company collates many small orders into large ones to buy directly from the feed manufacturers at discounted prices. Huzaifah said that more than 20,000 tons of feed have been purchased through eFisheryFeed.
Farmers can also apply for loans through eFisheryFund to pay for the feed purchases. Lending partners include digital bank Bank Jago, digital credit platform Kredivo, as well as P2P lending platforms Alami and Investree. A maximum repayment period of six months is normally offered for loans to buy feed and eFishery products, and for business expansion. So far, loans worth IDR 250bn have been channeled to 5,000 farmers in the eFishery ecosystem.
Huzaifah said eFishery itself does not have the license or authority to disburse loans like banks or P2P lenders; it only acts as an intermediary with risk management functions. “Our technology allows us to collect farm data, from which we are able to create a score for the farm,” he said. This score works like credit scores, helping lenders to determine which applicants are eligible for the loans and better gauge the nature and level of risk.
Raising more funds
eFishery is raising more funds for its expansion into the new aquaculture markets. Huzaifah declined to comment on a report that eFishery is in talks to raise Series C funds from investors like SoftBank and Temasek.
Elaborating on eFishery’s expansion plans, Huzaifah said that while countries like Thailand are similar to Indonesia, differences in language and culture will be hurdles to overcome. “The local farmers are more comfortable with using their own language, like operating smartphone apps” that are used to control eFishery’s devices. eFishery will need to conduct research on localization, as well as product-market fit, to see if a country’s specific market is a suitable target for the company.
“In addition, there are already many feeder technologies available in Thailand, including from local brands,” Huzaifah said. “This can be a challenge, but also an opportunity for eFishery to collaborate and develop the local aquaculture ecosystem with partners in Thailand.”
Longer term, Huzaifah said that eFishery is unlikely to go public in the near term, even if it’s one of the company’s aspirations. In March, eFishery co-founder and Chief of Staff Chrisna Aditya had told local media the company was considering an IPO within five years, after achieving a certain level of growth.
“IPO is currently not our main focus, and we will not be doing it in the near future. We are now focusing on increasing our impact for the millions of farmers in Indonesia,” Huzaifah said.