Indonesia’s tech startups are reeling in big money in seafood farming. That shouldn’t come as a surprise — the archipelago is home to one of the world’s longest coastlines and over 18,000 islands and islets.
But there’s another reason: A “technology gap” is holding the industry back from realizing its vast potential, according to investors and startups that CNBC spoke to.
Last year, several startups raised millions of dollars from big name investors to fill that gap: eFishery ($90 million in Series C), Aruna ($30 million in follow-on Series A), Delos ($8 million in seed extension) and FishLog ($3.5 million in pre-Series A).
“Indonesia is the second largest wild catch producer in the world after China. And we are third in aquaculture production after China and India. But if we talk about exports in terms of value, we are only 12th place in the world,” said Farid Naufal Aslam, co-founder and CEO of Aruna, a fisheries e-commerce startup. Aquaculture is the controlled cultivation of aquatic organisms such as fish and shellfish, especially for human consumption.
“A lot of decisions made are based on gut feeling or what ancestors have been doing for the past 60 years,” said Guntur Mallarangeng, co-founder and CEO of shrimp farm management company Delos.
And he’s not alone in thinking that.
“Indonesia’s fisheries industry has a lot of old-style players that have passed on conventional business practices from generation to generation,” said Yinglan Tan, founding managing partner and CEO of Singapore-based Insignia Ventures Partners, which invested in FishLog.
Those in Indonesia’s fisheries industry need more efficient technology and better processes, according to Tan.
“The only way that the industry can grow is when the farmers grow. If the farmers don’t grow and expand their businesses, we can’t really produce more fish,” said Gibran Huzaifah Amsi El Farizy, founder and CEO of eFishery, an aquatech startup.
Small-scale fisheries make up about 90% of the total number of fishers, according to the Marine Policy journal of ocean policy studies.
Though the country utilizes only 7.38% of its total potential area for aquaculture, it already ranks among the most productive countries in aquaculture production, according to a 2016 report by market research firm Ipsos.