Indonesian fishery and marine platform Aruna, which announced a $30 million Series A follow-on funding in January, has set an ambitious target to make Indonesia the center of the world’s maritime economy by 2045.
“We want Indonesia to be the center of the world’s economic maritime in 2045 with 200 million customers, 26 million jobs, and 4.5 million fishermen involved,” Aruna Chief Sustainability Officer Sus Utari Octavianty told TechNode Global in an interview.“Supported by an inclusive ecosystem, we want to boost expansion to various regions in Indonesia, while increasing Aruna’s market share in the global market.”
The company will also recruit local talent in building sustainable fisheries technology and infrastructure from upstream to downstream, she said.
“We’ll help fishermen across the country, from Aceh to Papua. The more, the better. We want to make sure that Aruna is capable of providing sufficient supplies to the growing demands of fishery products,” Utari, who is also the Co-Founder of Aruna, added.
Aruna announced in January a $30 million Series A follow-on funding led by Vertex Ventures Southeast Asia and India. The round also saw participation from existing investors Prosus Ventures, AC Ventures, East Ventures (Growth Fund), Indogen Capital, SMDV and SIG Venture Capital. This brings the total Series A funding raised to $65 million.
Aruna then said it will use the fresh funds to expand into new geographies in Indonesia and enlarge its market share in the global market. The funding will also be used to invest and bolster hiring to support its goal of building end-to-end technology infrastructure and sustainable fishery practices.
Vertex Ventures: ample opportunity for Aruna to become leading global player
With Aruna serving both the domestic and export markets in Indonesia, one of its investors, Vertex Ventures Southeast Asia & India, sees ample opportunity for the startup to establish itself as the leading global player in the business-to-business (B2B) fisheries market and the overall aquaculture industry.
“The market opportunity for Aruna is also very compelling as Indonesia is the world’s second-largest producer of seafood with an addressable market size worth around $35 billion,” the VC firm Partner Gary Khoeng told TechNode Global in a separate interview.
However, he noted that one of the problems that plaques the market today is the presence of an inefficient supply chain with a high reliance on the middlemen.
“Identifying this as a key pain point for fishermen and consumers, Aruna aims to solve this by controlling and vertically integrating the broken supply chain using technology. This is also done through its strong and diversified supply base across Indonesia,” he added.
Being an archipelagic country with over 17,000 islands and a coastline stretching over 100km, Indonesia is, first and foremost, a maritime country, and the second-largest fish producer after China, Khoeng said.
The fisheries industry represents a key pillar of Indonesia’s economy, contributing to 2.8 percent of the country’s annual gross domestic product (GDP). Despite this, Indonesia is only ranked 12th in the world’s leading exporting countries of fish and fishery products, with its export targets often not met, he said.
“Given the abundance in supply of seafood in Indonesia, we identified an opportunity to boost the country’s fishery exports by improving the value chain and aggregating supply to meet the required volumes of the export market,” he shared. “Traditional fishing has also led to various ecological disruptions and endangered fish supplies in Indonesia’s waters. However, there is potential to advocate and push for greener change in fishing habits and patterns. Through companies such as Aruna, we hope to sustainably grow the fisheries sector and ensure good livelihoods for fishermen in Indonesia.”
Besides funding, Vertex Ventures will provide other support, Khoeng said.
“Vertex Ventures Southeast Asia & India is part of Vertex Holdings’ global network of six funds. Apart from funding, we provide each of our portfolio companies with a dedicated portfolio manager who assists founders across a variety of areas including hiring, advising on scaling operations, and supporting their next round of fundraising to ensure a smooth-sailing process,” he said.
“Given Aruna’s objective of targeting the global export market, we will continue to introduce and promote the company to potential buyers and global partners sourced from our connections and network of limited partners,” he said, adding that the VC firm will also connect Aruna with other of its portfolio companies operating in the logistics or agriculture sectors both regionally and globally to create “meaningful and long-lasting partnerships”.
Aruna has operations in Malaysia, Singapore, China, Taiwan, Hong Kong, Canada and the US. There are more than 26,000 Aruna fishermen in 100 sites spread over 27 provinces across the archipelago.
“We believe that there are some major problems that prevent the fishery industry from growing to its full potential: inefficient supply-chain, poor data mining and management, and bad quality control,” Utari noted.
In the interview, she also shared details about Aruna’s plan, strategy, and challenges it faced.
Below is the edited excerpt:
Could you share more about what kind of strategy Aruna plans to enter into new markets? Will Aruna work with governments, local companies, or through collaborations and partnerships?
We believe that there are some major problems that prevent the fishery industry from growing to its full potential: inefficient supply-chain, poor data mining and management, and bad quality control.
To achieve sustainable competitiveness in fishery (i.e. fishery industries, small and medium-sized enterprises, media, academics, and government officials), we propose a flow chart for innovative natural resource management as a first stage, as part of a complete framework called Penta-Helix stakeholder management, for marine and fishery ecosystem.
What we do is in line with the government’s agenda to encourage the growth of an inclusive and sustainable economy by pushing the implementation of technology in all aspects, including in the fishery sector.
What is Aruna’s game plan?
We are not only committed to driving a positive impact for the people along the coastlines, but also meeting the growing global demands for sustainable fishery products. Aruna aims to make Indonesia the global maritime axis by revolutionizing the fishery supply chain, building financial inclusion, and implementing the concepts of sustainable fisheries.
What are the products or focuses Aruna have currently? Any new products/focuses in 2022?
We currently plan to have more commodities this year and more containers to send to more countries around the globe.
We focus on the following verticals: Profit, Planet, and People.
Profit, the economic variables we seriously take care of, will help our fishermen to put their mind on how we can sustain the business. That’s exactly when the “Planet” and the “People” will also be positively impacted. Here are some things Aruna has done:
● We aspire to give more than we take from the planet; hence we allocate every $0.05 of our profit for the betterment of the lives of the local fishermen and their families.
● Increasing effort is being made by the locals to collect marine plastic waste. We are set to buy and send it for targeted recycling, promoting sustainability, and striving for zero waste.
● We engage local residents, especially the youths, in managing the restored mangrove forests, as we understand that one of its ecosystem functions is to protect and serve as a frontline defense for people and property along the coasts.
● For our crab commodities, the activity of meat extracting results in a large amount of shell waste. We sell it to the manufacturers that can render the waste into fish feed. We also have initiated the Aruna Zero Waste Hub in Bangkalan, Eastern Java which plays an important role as our company’s responsibility for fishery sustainability.
● We empower females in the coastal areas by providing them job opportunities and education from inspecting and sorting out the commodities in our mini plants for further processing.
How big is the aquaculture industry in Indonesia? What is the potential of the aquaculture industry in Indonesia and the world?
We still have plenty of room to grow. Currently, Aruna has only fulfilled 15 percent of the current markets, implying a potential growth of more than five times by only fulfilling the orders from the existing customers. We are streamlining the supply chain from fishermen to large-scale enterprises. Our technology digitalizes the whole supply chain to generate better analytics about their industry, even in a remote area without proper internet access and it will continue to develop.
What is the ultimate, final model/ecosystem Aruna wishes to build? How far is the progress?
We want Indonesia to be the center of the world’s economic maritime in 2045 with 200 million customers, 26 million jobs, and 4.5 million fishermen involved.
Supported by an inclusive ecosystem, we want to boost expansion to various regions in Indonesia, while also increasing Aruna’s market share in the global market. The company will also recruit local talent in building sustainable fisheries technology and infrastructure from upstream to downstream.
What are the challenges Aruna faces?
There are some major problems that Aruna faces, which also holds back the growth of the fishery industry: inefficient supply-chain, poor data mining and management, and bad quality control.
We strongly believe that our business will only be sustainable if we care for the lives of the fishermen, their families, and ecological balance, including ensuring that the number of commodities we harvest aren’t depleted. The success of Aruna depends not merely on the technologies and sources alone, but also on how we care about our surroundings.
Another aquaculture tech startup eFishery has also raised funds and plans to expand. Is the competition stiff, or is there still a lot of room to grow for aquaculture tech startups? What is Aruna’s competitive edge against competitors like eFishery?
There is still a lot of room to grow for aquaculture tech startups. While Aruna is often mentioned alongside eFishery, the two companies have different focuses. In line with our tagline #SeaForAll, Aruna’s focus lies on all kinds of marine production, which includes both wild capture and marine aquaculture.
eFishery, on the other hand, focuses on ponds, both freshwater and marine. While we have different areas of focus, we wouldn’t see ourselves as competitors. Instead, we complement one another with the common goal of improving the fishery and aquaculture industry.
Would you be able to share Aruna’s financial results? (revenue growth in 2021, is Aruna profitable? Cash flow positive?) What is Arunas market share for Aruna?
With the growing global demands for sustainable fishery items, Aruna’s products are exported to Malaysia, Singapore, China, Taiwan, Hong Kong, Canada and the US. Some of which go to horecas, factories―packaged into value-added products, or to supermarkets. Aruna has also started distributing its products to domestic markets, this will also be one of our focuses this year.
As per 2022, with the presence of Aruna, more than 26,000 fishermen are impacted and more than 5,000 new jobs in rural areas across the country are created. The fishermen’s income increases three to 12 times or even more.