Indonesia’s Gross Domestic Product of Agriculture, Forestry, and Fishery was USD 158 billion in 2021. Moreover, the Agritech Market in Indonesia is expected to grow due to the increasing adoption of digital farming tools and government initiatives that make lending easier. The market is expected to exhibit an upward trend in terms of value over the forecast period FY’22-FY’26, outperforming previous years, with the market consistently expanding. AgriTechs will reshape value chain relationships and create entirely new ecosystems.
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1. Agriculture, being the pillar of Indonesian economy accounted for around 13.28% of country’s Gross Domestic Product (GDP)
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The Gross Domestic Product of Agriculture, Forestry, and Fishery in Indonesia stood at USD 158 Billion in the year 2021 growing at a CAGR of 5.8% during 2016 to 2021. GDP of Agriculture, Forestry, and Fishery can further be divided into five broader components namely plantation crops, food crops, fishery, livestock, and horticulture. The plantation crops like palm oil, rubber, coconut dominate the agricultural landscape attracting interest from large agribusinesses in the global supply chain constituting 26.4% of the agricultural GDP. More than 40% of the Agricultural GDP is contributed by Food Crops like rice, wheat, soybean and Fishery sector.
2. Almost 50 AgriTech Startups are spread across the 13 cities of Indonesia
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These 50 startups are spread across 13 cities of Indonesia providing great opportunities for the Agritech sector to emerge. Emerging unicorn iGrow in the Agritech market of Indonesia is established in Yogyakarta city. Another unicorn TaniHub is established in Jakarta which is a hub for 18 startups already. Currently, it operates from five regional offices and distribution hubs located in Jakarta, Bogor and Bandung in West Java, and Yogyakarta and Surabaya in East Java. These startups are contributing towards the agritech market by their innovations and new product range.
3. Indonesia’s growing agritech startups have attracted millions of dollars in investment.
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35% of the startups are funded by foreign investors and 30% are funded by domestic investors. Examples of startups which are domestically funded are Eragano, Magalarva, Pasarnow, etc. All the 17 startups are funded by Private Equity Venture Capitalist and none is funded by Angel Investors. Examples are Kandang, Kedai Sayur, eFishery, etc. Furthermore, TaniGroup, has closed USD 10 million Series A funding, led by Singapore-headquartered venture capital firm, Openspace Ventures, with participation from investment firms.
4. Rising Adoption of Data Analytics, Artificial Intelligence & Geo-Tagging Among Agritech Players is the future of Agritech Space in Indonesia.
Implementation of data science algorithms & analytics using artificial intelligence & machine learning is going to amplify greatly. Additionally, startups would be able to predict demand & supply, route planning using data in case of supply chain & output access. Moreover, Geospatial Tech & Geo-Tagging technology will enable startups to leverage geospatial & remote sensing data to create better & scalable agri solutions, without any unnecessary details. Also, there will be a widespread adoption of drones for pesticide spraying etc, especially among medium & large farmers with rising affordability. Furthermore, autonomous & semi-autonomous farm robots will be used by cooperatives & large farmers for labor-intensive activities like weeding, spraying, and harvesting that have high human error rates.