Currently backed by the prominent Y Combinator startup accelerator, Eden Farm wants to become Indonesia’s next food distribution network.
According to co-founder and CEO David Gunawan, as Indonesian restaurants rely on markets for fresh ingredients, buyers are often forced to deal with high markups and unreliable supplies. Similarly, farmers tend to receive low profits on their goods because of a series of middlemen between them and the restaurants.
“Every restaurant in Indonesia faces a huge problem with supply, stability and extreme price volatility,” David told TechCrunch. “Fruit and vegetable prices can go up and down around 30 to 50 percent every day. In peak season, for certain commodities, prices can go up 10 times, like chillis in the summer.”
The company originally started as a farm itself. After speaking to other farmers and researching Indonesia’s agricultural market, Eden Farm shifted its focus, tackling major issues in food distribution head-on.
Eden Farm offers a mobile app to help farmers plan their next harvests, mitigating problems with supply and demand. By buying products wholesale from the farmers, the company both ensures price stability while helping farmers to earn a larger profit.
The AgriTech startup also offers a money-back guarantee to its buyers. As explained to TechCrunch, restaurants in Indonesia typically need to throw out about 30 percent of the produce purchased from markets. Eden Farm washes and inspects the goods prior to delivery and will refund the price of any unusable items, saving the buyers up to 50 percent.
About half of the company’s deliveries are done in-house, with third-party logistics providers taking care of the rest. With the exception of certain vegetables, most of the startup’s produce is sourced from farms close to the buyers, ensuring freshness and delivery in under 24 hours.
In addition, the company partners with two major markets in Jakarta to guarantee enough supplies during peak season.
However, in its quest to become a major food distribution network, Eden Farm has specific problems to overcome.
“We are serving a very traditional industry,” the CEO explained. “Farmers already have their own way of planting and their own culture, which has lasted for generations, and we’re trying to change that.
“At first we didn’t know how to talk to them, how to convince them, but we learned a lot about how to pay respect to farmers. Every time we go to a village, for example, we know how to present, who to pay respects to, like the elders there. We have to do that before the elders will introduce us to the farmers in the area.”
The startup works with about 60 farmers and 200 restaurants in six cities throughout the country.
While it currently focuses on produce and non-perishable items, the company plans to expand into meat and seafood once it’s reached 25,000 restaurants. It also plans on extending into smaller markets as its order volumes increase.
Eden Farm recently raised $1.75 million in an oversubscribed seed fund. With the funds, the company plans on expanding into five more cities.