Founder Series: Febrianto Gamal (COO) and Ramavito Mountaino (CFO) of Edenfarm
This is the 5th monthly founder series where we feature interviews with startup co-founders in our portfolio.
Eden Farm is an Agri-food tech startup, actively supplying all kinds of food ingredients from local producers across the country to culinary businesses in major cities. Since its establishment in 2017, Eden Farm has been cutting off middlemen between farmers and restaurants to increase efficiency by distributing fresh food products from farmer’s community and central market to traditional culinary businesses, traditional wet market, and HoReCa (Hotels, restaurants, and cafes).
Eden Farm, founded in 2017, has accumulated a total of $20.7 million, closing their latest round last November and was accepted for Y combinator’s program back in 2019. In this month’s newsletter, Eden Farm’s co-founders, David Setyadi Gunawan, Febrianto Gamal, and Ramavito Mountaino will share their journey on building Eden Farm in the last 5 years.
What was the motivation behind Eden Farm and how did it all begin?
It all began with a 1,000 sqm hydroponic farm at a rented rural land 50 km from Jakarta. All of the 3 co-founders farmed and sold hydroponic lettuce door to door to cafes in Jakarta for about a year. We then found a logic gap within the supply chain during our farming days. The demand from restaurants was pretty much consistent and they really needed fresh vegetables daily. Then we asked ourselves, “Then why do most farmers in Indonesia live in a poor condition?”. We expanded our perspective by talking to multiple farmers, traders, restaurant owners and our very first pre-seed investor to see what is going on and how we could solve this “poor farmer” issue. That is when we found the inefficiency in the food supply chain. We identified 2 main motivations in solving this inefficiency:
· As an Indonesian: We need to give more income to these farmers to attract the younger generation to farm. Can you imagine if we ran out of farmers? We will lose part of our sovereignty as a nation. So, we calculated and estimated that we need to increase their income by at least 200%.
· As a Businessman: Solving inefficiency in the food supply chain is a good business with super opportunity. Everybody needs food! And the restaurants hand out consistent demand which answers the true need of every farmer. We estimated that we could save at least 30% of our customers' raw material cost if we could solve this inefficiency issue.
With those 2 motivations we keep our heads down and build Eden Farm to what it is today. Now, more than 50.000 culinary businesses in Java’s major cities and 3.500 farmers across multiple farming villages enjoy the benefit of Eden Farm.
How has Eden Farm helped Indonesian farmers? And why did you decide on a B2B approach instead of B2C?
The B2B approach is mainly because of its nature of demand consistency which translates as a demand guarantee for our farmers. Farmers extremely need this because these farmers require a lengthy time for growing crops. For each crop, there are 5 growth stages; seed to sprout, vegetative, budding and flowering, ripening, and lastly harvest. Each of these stages takes a minimum of 35 days and 90 days at maximum, which means 175 days at the very least for one harvest cycle to complete. Furthermore, as Indonesia is still underdeveloped on the cold supply chain, everything that is harvested has to be sold on the same day. Hence, there has to be certainty in demand to deal with both problems.
We are not only bringing demand consistency but also huge volume directly from the B2B customers. They have never had this market access before other than selling with a consignment mode to the middlemen. Combine this consistency and volume, we have managed to give our farmers >200% of their normal income. We have created a solid presence in these farming villages by building the Eden Collection Facility (ECF), where we give assistance to farmers, educating them with a structured cropping pattern scheme and sustainably absorb local agricultural produce. This not only brings more income to our farmers partner but also alleviates the village economy as a whole by 3 things:
· Bringing back productive people back to the village because now farming is eligible for a full-time job
· Provide employment for local villagers
· Attract the younger generation of villagers to help their parents with farming, thus kick-starting farmers' regeneration.
There were some other players existing in the farming space when you first launched, what was the competition like and how did you maintain your position?
We never see other AgriTech startups as competitors because we always position ourselves as their supplier. I believe the strength of Eden Farm lies in its supply network and operation infrastructure which was developed specially to cater to businesses needs including to our startup friends. We have consistency in competitive pricing, 99% demand fulfilment, complete product catalog, able to serve specific delivery time requests, and we are very focused on those aspects.
4.What were some major pivots in plans and strategies throughout building the startup? How has it helped Eden Farm grow?
There were no major pivot plans and strategies so far. Our business model is very resilient and we have a well-diversified supply and demand network to support the business transformation in the right direction with no dramatic shift.
What is next on your roadmap for 2022? Do you have any plans on quick commerce or e-grocery and getting into B2C?
We will continue to focus on Java Island, build entry barriers by expanding our market share to secure more supply sources and collaborating with more producers to develop new SKU such as meat and fishes to increase wallet share and customer loyalty.
We are excited to see the mushrooming of quick commerce, and we are going to keep onboarding new customers in every B2B segment, including quick commerce. We have proven ourselves to be a good supply partner to almost every commerce startup in Indonesia.
