8 minute read
Case Study

Fintech farmers: Inside CROWDE’s mission to transform agriculture

Group of hardworking ladies.

For Indonesia’s 33 million food growers, a startup brings raw inputs, fresh tech, and working capital

CROWDE CEO Yohanes Sugihtononugroho

CROWDE CEO Yohanes Sugihtononugroho

Situated on the Pacific Ring of Fire, Indonesia’s 120 active volcanoes have the agricultural side effect of producing some of the world’s most productive soils. However, the majority of the country’s 33.4 million farmers haven’t been able to access bank loans and lack the simple tech tools that could connect them to larger, more profitable markets. Indonesia needs to farm enough to provide food security to the country, so agriculture continues to be a priority industry in the country.

CROWDE is a financing platform for agriculture, aquaculture, and livestock projects. We help farmers who need access to working capital through our financial access,” says co-founder and CEO Yohanes Sugihtononugroho. “We are focusing on how to get these farmers out of poverty and how to help them have a better life.”

With its unique suitability for growing natural rubber, cocoa, palm oil, coffee, spices, and rice, Indonesian agriculture remains the country’s single largest economic sector. Yet the industry is in need of significant technological upgrades and access to working capital on farmer-friendly terms.

“We started by offering farmers financial assistance, but now, we’re building the technological infrastructure for the new farming ecosystem in Indonesia,” explains Sugihtononugroho, an experienced Indonesian farmer and entrepreneur who initially established CROWDE as a crowd-investing platform that enabled farmers to raise working capital. “We want to give to farmers to make sure they can focus on maintaining our food production. That’s one of the biggest pieces of our work.”

The company raised $9 million in Series B funding in October 2021 to scale its technology for the farming ecosystem and connect farmers to investment capital. CROWDE has provided non-cash assistance totaling Rp 253.7 billion—approximately $17.77 million USD—in fertilizer, seeds, and equipment, as well as long-term training, to tens of thousands of farmers since 2017.

An Indonesian farmer tends to a garden

A farmer in Indonesia

How CROWDE works

CROWDE’s focus is on helping small and medium-sized farmers develop their businesses and implement their ideas and on attracting younger generations of farmers to the agricultural sector. Almost 50% of workers in Indonesia work in the service sector. Meanwhile, 65% of Indonesian farmers are over 60 years old, but younger generations are not entering the agricultural field at high rates; in fact, unemployment rates are rising in rural areas. That’s risky, because for the country to avoid becoming food-insecure, farming needs to be a productive, thriving business area.

CROWDE takes a multi-pronged approach to helping farmers. Individual investors, as well as capital institutions like banks, venture capitalists, or impact ventures, provide farmer-friendly capital to enable micro, small, and medium agricultural enterprises to grow, create employment, and contribute to their communities. CROWDE’s leadership team has experience assessing agri-project financing and managing the risks related to agriculture, enabling them to provide investors with enough information to make an educated investment.

Not only does CROWDE provide an online investment platform, the company also provides farmers with basic technology to connect with investors and buyers. CROWDE cultivates relationships with farming communities, local governments, and non-governmental organizations to support farmers with cultivation, train farmers in sustainable agricultural practices, and provide references for farmer credibility. CROWDE also works with agricultural product companies to supply farmers' cultivation product needs. Lastly, CROWDE’s relationships with modern retail companies, hotels, and culinary businesses enable them to buy crops directly from the farmers, ensuring access to post-harvest marketing.

Sugihtononugroho notes that funding comes to farmers in the form of supplies, rather than cash, to keep the focus on planting, growing, and harvesting. For example, CROWDE provides raw material inputs like fertilizer, direct disbursement of funds through the farmer's shop to purchase project needs, and loan repayments in the form of agricultural crops. CROWDE assists with project supervision, and CROWDE partners help distribute crops. “When farmers get access to financing, they’re never getting any cash, only fertilizers,” says Sugihtononugroho. “We eliminate the nature of money, so farmers can focus on planting.”

CROWDE’s current focus is on enabling farmers to use technology; helping them end to end, from seeds to sale; creating a new generation of farmers by onboarding and inviting more farmers to the CROWDE ecosystem to use CROWDE’s product. Ultimately, CROWDE hopes to onboard every farmer in Indonesia and have them using CROWDE every day.

Scaling with Google support

CROWDE uses Google technology to build solutions with a range of complexity for the company’s different stakeholders. CROWDE uses Google Cloud to manage sensitive, high-traffic data. “Google enables us to focus on the core of the business,” says Sugihtononugroho. “Google takes care of infrastructure, so we and our farmers can focus on the problems we want to solve.” The company also provides farmers with simple tools like GSuite emails— often their first email accounts.

In order to scale their support of Indonesian farmers, CROWDE participated in the three-month Google for Startups Accelerator: Indonesia in 2021. “Google for Startups Accelerator is one of the most-respected accelerator programs, and I dreamed of participating,” he says.

CROWDE’s Google mentors drilled into topics like data collection and management. CROWDE collects data that affects agricultural products, such as weather and soil quality. “We really scrutinized and focused on using data as a company,” Sugihtononugroho says. “The data uncovered the truth behind the traction we have, how to have more engagement with farmers, and how to focus on certain crops. With those things, we grew more than three apps in just one month.”

After working with Google mentors in machine learning, CROWDE decided to focus on data collection and data warehousing before moving on to machine learning. “We realized machine learning wasn’t what we needed to build in the next 24 months,” says Sugihtononugroho. “We can focus our tech team on building what we really need for our business.”

Fundraising and advice

Sugihtononugroho says CROWDE wants to help more farmers in a cross-sectional way and is focused on building relationships. He takes a similar approach to fundraising. “For me, fundraising is a relationship business,” he says. “It’s made it easier for CROWDE to get traction–we are not contacting everyone for money, we just want to build relationships and support others.”

His advice to other startup founders is that things always get harder before getting easier. “When you do something that gets harder every day, it means you’re on the right path,” he says. “Don’t stop when it gets tough; trust the process.”

Learn more about CROWDE