TaniHub Group Secures $65.5 Million in Series B Funding

TaniHub Group, an Indonesian startup dedicated to enhancing market access and profitability for farmers, has successfully completed a $65.5 million Series B funding round. This investment was spearheaded by MDI Ventures, the venture capital division of Telkom Group, a leading Indonesian telecommunications company.

Investor Participation

The funding round also saw contributions from a diverse group of investors, including Add Ventures, BRI Ventures, Flourish Ventures, Intudo Ventures, Openspace Ventures, Tenaya Capital, UOB Venture Management, Vertex Ventures, and Telkomsel Mitra Inovasi (TMI).

Previous Funding and Total Raised

Openspace and Intudo Ventures had previously invested in TaniHub’s $10 million Series A round, which was announced in May 2019. With this latest round, the total funding secured by TaniHub now reaches approximately $94 million.

Company Overview and Network

Established in 2016, TaniHub currently maintains a network of over 45,000 farmers and 350,000 buyers. This network encompasses both businesses and individual consumers.

Streamlining the Supply Chain

The company’s core mission is to improve farmers’ earnings by optimizing distribution channels and reducing the number of intermediaries between farms and buyers, such as restaurants, grocery stores, and vendors. This is achieved through its three primary units: TaniHub, TaniSupply, and TaniFund.

TaniHub’s Core Units

TaniHub functions as a B2B e-commerce platform, directly connecting farmers with their customers.

Order fulfillment is managed by TaniSupply, the company’s logistics division. TaniSupply operates six facilities dedicated to warehousing and processing, where produce can be efficiently cleaned, sorted, and packaged within an hour before delivery. Deliveries are handled by TaniHub’s own fleet and third-party logistics partners.

TaniFund is a fintech platform offering loans to farmers. These loans support crop cultivation and are repaid through sales facilitated by TaniHub.

Credit Scoring System

According to co-founder and CEO Eka Pamitra, TaniFund’s credit scoring system leverages three years of performance data, the company’s specialized knowledge of the agricultural value chain, and collaborations with financial institutions.

“Over 100 data points are analyzed during the credit risk assessment process. For cultivation financing, TaniFund customizes credit scoring based on commodity-specific agricultural and market risks, in addition to standard borrower E-KYC procedures,” Pamitra explained. “The presence of TaniSupply and TaniHub as guaranteed buyers within the ecosystem also serves to mitigate loan risk. TaniFund intends to enhance its credit scoring through advanced data processing and machine learning techniques.”

Future Plans and Expansion

The newly acquired funding will be allocated to strengthening the upstream and midstream segments of TaniHub’s supply chain. This includes developing new cultivation areas, expanding processing and packing facilities, and increasing warehousing capacity.

The company also plans to broaden its geographic reach beyond Java and Bali, sourcing and selling products locally. Furthermore, TaniHub will continue refining its supply-demand forecasting model to assist farmers in planning crop cultivation and timing, aiming to stabilize prices and ensure consistent supply.

Exploring Precision Farming

TaniHub will also investigate the implementation of precision farming technologies.

Export and Domestic Market Focus

In recent years, TaniHub has initiated exports of various fruits and spices to the United Arab Emirates, Singapore, and South Korea. However, the company’s primary focus for the current year is expansion within Indonesia, given the country’s substantial $137 billion F&B market and the fragmented nature of its agricultural sector.

Growth During the Pandemic

Despite the challenges posed by the COVID-19 pandemic, TaniHub reported a 600% year-on-year revenue increase in 2020, driven by the surge in demand for online grocery services.

“We adjusted our expansion plans and concentrated on optimizing the capacity of our seven existing warehouses to meet the increased demand in the B2C segment and facilitate farmer onboarding. The increased adoption of online fresh grocery purchasing, coupled with farmers’ heightened willingness to collaborate, proved beneficial, particularly as traditional local markets were temporarily closed due to lockdowns,” Pamitra stated. “The pandemic also fostered increased engagement from provincial governments, seeking collaboration with TaniHub to support local farmers and SMEs.”

Government Collaboration

TaniHub is currently collaborating with several Indonesian government agencies, including the Ministry of Trade, Ministry of Agriculture, and the Ministry of Cooperatives and SMEs, to onboard more farmers, F&B businesses, and expand export opportunities.

MDI Ventures’ Perspective

Sandhy Widyasthana, director of portfolio management at MDI Ventures, commented in a press release, “TaniHub Group plays a vital role in the transformation of the agricultural sector and has demonstrated its ability to positively impact the livelihoods of farmers. We are confident that our investment will enable them to continue their work and extend their reach to more farming communities throughout Indonesia.”