In the year When online marketplaces started to take off in Indonesia in 2016, serial entrepreneur Rama Notowidigdo thought about creating a digital marketplace where farmers could connect directly with customers, giving birth to Sourbox. However, he quickly realized that many rural farmers are not familiar with technology and sales, so he developed his business idea as a technology-enabled grocery service and B2B agriculture supplier.
The company buys fresh produce from farmers and sells the goods to its end customers through the Sayurbox app and website. It also sells large quantities to various supermarkets and beverage manufacturers in Indonesia. The organization works with farmers’ groups in West Java, Surabaya and Bali to facilitate the agricultural supply chain and logistics process. By moving warehouses and springs directly near the farmlands, it creates a convenient environment for farmers to easily transport and store their fresh produce.
Sayurbox was born in In 2016, Notowidigdo met Amanda Cole, who was working on a farm in West Java. Cole put her expertise in farm operations and management, while Notowidigdo provided his expertise in building the technology business. That same year, industrial engineer and technology entrepreneur Metha Trisnawati joined the company.
With millions of hectares of arable land spread over 17,000 islands, agriculture is a vital sector in Indonesia and accounts for the largest share of the country’s workforce. According to 2020 data provided by Indonesia’s Central Bureau of Statistics, about 30% of Indonesia’s workforce, or about 8.23 million people, depend on the agricultural sector for their livelihood. However, the sector faces many challenges, including weak supply chain infrastructure and lack of access to advanced technology.
“One of the main problems [of agriculture supply chains] Saplings planted in rural and remote areas are scattered across infrastructure areas, making transportation difficult. According to Arif Zamani, Chief Financial Officer of Surebox, farmers have to go through middlemen to sell their produce, so there is zero access to their customers. CASIA
The startup not only creates a sales channel for farmers, but also provides business insights based on the data collected by the app, so farmers can learn the patterns of demand in the market and adjust the supply. The Surebox team conducts regular workshop programs to teach farmers how to read the data and improve their productivity, and also frequently shares insights via WhatsApp.
“Supply and demand often do not match. For example, the price of chilies fluctuates wildly due to skewed supply, while demand is always there. This can be prevented as pepper is not a seasonal plant. They grow year-round, so farmers need to be able to plan better to always meet demand, Zamani said.
Great potential, many challenges
The company currently works in partnership with 1,500 farmer groups in Indonesia with a total of over 10,000 farmers. Sourbox has five sources in West Java to serve customers in Greater Jakarta and two other centers in Surabaya and Bali. “Indonesia has more than 33 million farmers, this number is definitely very small, so we have a lot of room to grow,” Zamani said.
Sayurbox generates revenue by taking a margin from the final commodity price compared to the price it pays to farmers. The firm did not disclose the amount of this premium but said it depends on the products and quality.
In May, Sayurbox raised an undisclosed amount in a Series B funding round led by Astra Digital International and Syngenta Group Ventures, with participation from Ondine Capital and other investors. Astra disclosed a $5 million investment in SureBox in its Q1 financial report, although the company did not disclose figures. Cyrbox is also supported by Indonesian e-commerce unicorn Tokopedia.
The company acquires its products by integrating local know-how and business models beyond the domestic market. “Amanda traveled to Hangzhou and spoke with top Internet and e-commerce business CEOs from Greater China and Southeast Asia and was able to transfer that experience to optimize Cirbox’s products,” said Randolph Hsu, Founding Partner at Ondine. Capital. “When I spoke with Amanda, we realized that she was very focused. She understands that platform business can expand into other areas such as fintech, advertising or data analysis, but instead of being fragmented… she puts all her efforts into bringing the best user experience to her clients.
The vast market around Indonesia’s agricultural sector has inspired many technopreneurs to build businesses that solve agricultural problems. Besides Sayurbox, other agritech startups in the country include Tanihub, Kedai Sayur and iGrow, most recently by Linkja.
Sayurbox also wants to differentiate itself by targeting the problem of waste in the supply chain. Fresh produce is usually classified into grade levels that describe the quality and condition of the ingredients. In Indonesia, categories are often A to B and imperfect, says Zamani. Imperfect produce is usually fresh and edible but has blemishes or bruises and is often not accepted by supermarkets or other distributors and is often left in the field or destroyed.
But Sayurbox collects fruits and vegetables at all grade levels, as much as possible to minimize harvest losses, Zamani said. “Building a business in this sector brings many challenges. First, we have to convince our customers to buy unfinished products. Most customers only want to buy grade-A products, which means that no one buys imperfect products, so they contribute to huge food waste,” Zamani said.
The platform encourages consumers to sell and buy imperfect items at low prices, Zamani explained. Sirbox continuously educates customers through online campaigns on its app and social media accounts.
“The next challenge is to gain the trust of farmers. We have field teams who regularly interact with farmers and provide education and training on various topics. For example, how to handle production better and how to improve crop yields, cash management and so on,” added Zamani. The company claims that partner farmers have reduced waste at each stage of production from 30% to 5% thanks to the platform. The firm provides regular weekly income to farmers after joining the system, Zamani said.
The startup is working with fintech platform Awantunai to provide loans to farmers. Farmers who have partnered with Sayurbox for more than six months can get a loan of 10 to 50 IDR 50 million ($704-3,500) from the company’s partner. So far, Sourbox has facilitated loans to more than 5,000 farmer groups.
In the future, Sirbox plans to expand its coverage and reach more farmers outside of Java. The company is developing tools for farmers to easily analyze data and business insights, Zamani said. The startup will continue to improve its capabilities for an efficient distribution process. Since the outbreak, our daily orders have increased by 4x, so we will continue to focus on optimizing services for existing customers, especially those in Greater Jakarta.
This article is part of KrASIA’s “Startup Stories” series, where KrASIA writers talk to founders of tech companies in South and Southeast Asia.