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Smallholder AgriTech Southeast Asia Landscape 2021

Despite the outbreak of the global COVID-19 pandemic, AgriFood Tech startups raised more than US$26.1 billion in 2020, representing a 15.5% year-on-year increase. It was also the first time investment in upstream startups closer to the farm (eg. farm management systems, farm robotics and agribusiness marketplaces) surpassed that of downstream in 7 years, according to AgFunder's 2021 AgriFoodTech Investment Report.

The Smallholder AgriTech Southeast Asia Landscape focuses on high-impact technologies that impact smallholder farming. These startups have the potential to provide farmers better access to information, markets, credit and inputs, resulting in higher productivity and profitability. In 2020, Grow Asia identified five key agritech business models in Southeast Asia: Farmer Advisory, Peer-to-Peer Lending, Traceability, Digital Marketplaces and Mechanization Platforms.

In the first session of Grow Asia’s Digital Learning Series for 2021, we will provide an update on the Smallholder AgriTech landscape in Southeast Asia and explore a widespread shift across the region as we see farmer advisory solutions explore adjacent business models in order to grow, particularly in the context of the COVID-19 pandemic.

Here is a recording of the webinar:


Updates to Smallholder AgriTech SEA Landscape

By Wong Jin Quan, Programme Manager, Padang & Co

Agriculture in Southeast Asia has been badly affected by COVID-19, but this forced many people to start adopting digital solutions, including smallholder farmers. Some startups contributed their part to alleviate the crisis, e.g. digital marketplaces gained traction, bridging farmers’ supply to consumer demand that were disrupted by movement restrictions. There were also other startups that were forced to pivot their business models.

On the global stage, more attention has been called to strengthen food systems. The United Nations declared 2019-2028 as the Decade of Family Farming and the UN Food Systems Summit (UNFSS) is set for September 2021. Leading up to the UNFSS, the World Economic Forum is working to establish a network of regional food innovation hubs. Investment in broader agrifood tech in ASEAN is increasing. Major agri corporates such as Olam and Yara are pushing ahead with their digital initiatives to enable smallholder farmers.

In this year’s edition of the Smallholder AgriTech SEA Landscape, we expanded the scope slightly to include startups that might not directly impact smallholders, but will work with organisations that impact smallholders. An example would be PearlPay, a technology provider for rural banks, which can in turn provide better financial services to smallholder farmers. We also went deeper into Farmer Advisory by identifying 6 key features. 97% of Farmer Advisory startups have 1 or more of these features.

This expansion of scope and discovery of new startups led to an updated count of 163 startups that falls within our definition of Smallholder AgriTech. Their logos have been compiled into a landscape map. These startups raised a total of US$53 million in 2020, showing good traction of continued growth. Indonesian Digital Marketplaces continue to take the lead among other countries and business models.

Following last year’s format, we came up with 3 predictions on the sector trends. 1. Agribusiness corporates will play a significant role in driving digital adoption among smallholders. Their network of offline access to the farmers remains invaluable in scaling solutions. Startups can seek partnerships by providing value in complementary areas. 2. More startups focusing on sustainability will emerge in this sector. Many startups have sustainability as part of their impact statement, but more startups with sustainability as a core driver will emerge. 3. Diverging ecommerce trends between input and output. Digital marketplaces connecting farmers’ produce to buyers have grown strongly, but the same has not been seen for farmers buying inputs. A digital inputs marketplace remains a challenging proposition in the current state of infrastructure and farmers’ preferences to buy through trusted behaviour.

Read more on the landscape deck.


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