Three years ago, Eka Pamitra – previously a World Bank analyst – started a business with five of his friends that is aimed at helping farmers in their native country of Indonesia. The company TaniGroup just landed $10 million in its first round of venture capital financing, with the goal of extending their service across the nation with the help of the government. The series A was raised by Openspace Ventures, Golden Gate Ventures, Intudo Ventures, and The DFS Lab funded by the Bill and Melinda Gates Foundation.
TaniGroup currently provides their service to over 25,000 Indonesian farmers to improve the rates they’re getting for their crops and to help expand their businesses. The group does this by operating a business-to-business program (TaniHub) that allows farmers to sell their goods directly to retailers; a reach that extends to roughly 400 small to medium enterprises and around 10,000 consumers. Additionally they handle a microloan fund (TaniFund) that allows farmers to utilize working capital financing. The fund is registered with the Financial Services Authority as well as a member of the Indonesian Fintech Lenders Association. With the help of TaniGroup, farmers can increase their overall revenue by roughly 60 percent or even more.
“The most important thing is not necessarily pricing; farmers care more about the certainty of sales. Many are afraid to plant too many crops because local aggregators or middlemen don’t have the capacity to absorb everything.” stated Pamitra. “The fund focuses on preferred farmers we want to fund to help produce more or release them from the middlemen that currently fund them.”
Middlemen are known for operating much like a cartel, incorporating extra costs and conditions, but often they’re simply farmers who assist with the coordination of sales with others. Pamitra went on to say, “Some middlemen are the smartest in their group of farmers. We try to empower them through TaniFund. They often start teaching others their tips and can have a positive impact”.