In this call, ⁠Febi Agil Ifdillah⁠⁠ (co-founder and CTO) and Bayu Adi Persada⁠ (CPO) dial in from Indonesia. They are tech leaders at ⁠Elevarm⁠, a digitally-enabled ecosystem to uplift the lives of 15 million smallholder farmers in their country’s fragmented agriculture industry and ultimately contribute to the world’s food and environmental sustainability. Their call with Paulo comes as they just launched their first sustainability and impact report⁠⁠, which is a great introduction not just to Elevarm, but also Indonesian agriculture.

Timestamps and Highlights

(01:15) Introducing Elevarm and our guests;

(02:56) How a tech founder and a seasoned unicorn senior product manager found their mission in agriculture;

“You mentioned that Indonesia is one of the biggest agricultural companies in the world. But the reality is that our smallholder farmers are still underprivileged and the most vulnerable factors in the whole supply chain of the food that serves our table…The market is very massive. I think my personal mission comes into play at that point, and the ecosystem right now has no single player of agritech that is leading the market. So the opportunity is still huge, and the market is still vast.” – Bayu Adi Persada

(10:13) Elevarm’s outside-in, holistic ecosystem approach to uplifting farmers;

“Farm digitalization has always been our goal. So we hope to enable farmers to thoroughly track their land, their farming practices, and their business operations. In the future, we can imagine [greater] digitalization. We can have 360 degrees of data, including farmers’ farming habits, farmers’ production, market volatility dynamics, etc. So by digitizing their operations, they are in a better position to meet marketplace demands as well. They can attract more premium pricing and prepare overall financial literacy and ultimately leading to increased farm sustainability and profitability.” – Febi Agil Ifdillah⁠⁠

(22:43) Launching ⁠Elevarm’s first sustainability and impact report⁠ and key insights into Indonesian agriculture;

“Farming is not a very attractive job these days, right? Most young people want to be YouTubers or TikTokers because they think they can make a lot of money. But this will increase risk in the ecosystem itself, in the local ecosystem where only senior farmers are doing the job. Who will take care of the land after the seniors have done the job or are retired? This has also been of interest to Elevarm. Currently, 20-28% of our farmers are still young. This number has increased by 30% from before, thanks to Elevarm’s intervention. We can make farming attractive again for young farmers.” – Bayu Adi Persada

About our guest

Febi Agil Ifdillah⁠ is co-founder and CTO of Elevarm. Growing up in a remote village in Bogor, Indonesia, Febi is a first-generation college graduate. He studied under full scholarship from the Indonesian Government to pursue a degree of Bachelor of Science in Computer Science/Informatics from (ITB) Bandung Institute of Technology’s School of Electrical Engineering and Informatics. He was a Machine Learning engineer before jumping into the agritech space.

⁠Bayu Adi Persada⁠ is CPO of Elevarm. He has had more than seven years as a product manager, head of product, and CPO for several companies in Indonesia, including Bukalapak and Grab. He received his Bachelors’ from the Bandung Institute of Technology in Informatics Engineering and his Masters in ICTs for Development from The University of Manchester.

The content of this podcast is for informational purposes only, should not be taken as legal, tax, or business advice or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any ⁠⁠⁠⁠⁠⁠Insignia Ventures⁠⁠⁠⁠⁠⁠ fund.

Transcript

*transcripts are edited for concision and clarity

How a tech founder and a seasoned unicorn senior product manager found their mission in agriculture

Paulo J: Since this is our first time really talking about Elevarm, maybe you can walk us through how Elevarm first started, Febi? What were the personal factors and market factors that made you decide to join forces with Lintang, the CAO, and Bayu Syerli, the CEO, to start and join Elevarm?

Febi A: Elevarm was founded in February 2022, so I’ve been around for around 15 months. It’s still young, but I think what started Elevarm was a combination of recognizing a market opportunity in the agriculture industry and wanting to make a positive impact on the lives of small farmers in Indonesia.

It was founded with the goal of making a positive impact on the agriculture industry in Indonesia, which is an agricultural country. I think Indonesia has over a million small farms that contribute to a significant portion of the country’s agriculture output. So, this is around 30% of the Indonesian workforce. However, small farmers face a range of challenges such as limited access to finance, minimal knowledge of modern farming, and difficulty in accessing markets.

Elevarm wants to solve that. It’s a huge market with lots of room for making an impact. On a more micro level, the agriculture industry globally needs innovations, and that’s actually what drew me into the industry as well. I’ve been in the industry for around close to six years heading some initiatives in the sector, and I had the opportunity to work with small farms in Indonesia and solve for the challenges that they face. So, I realized the potential for technology to make a significant impact on the agriculture industry and decided to start with the co-founders to address these challenges on a larger scale.

Paulo J: Just a quick follow-up on that. I’m curious to know how an engineer actually gets into agriculture. How did you discover it? Was it something that was part of your childhood or did somebody introduce it to you?

Febi A: I grew up in a small village in an area in Bogor, which roughly translates into “old forest” in English. So it’s a bit remote. Until now, I still have difficulty accessing the internet when I visit my mom.

So I was surrounded by farm fields, etc., and saw farmers every day when I went to school. Actually, I have no relatives in the farming industry. But I think I was surrounded by that environment and upbringing that made me think more about the rural area and how I can give back to the community right after college.

But I think what really got me into the industry is that I got a scholarship from the Indonesian government until college. So I really wanted to give back to the community. That’s the first thing.

The second thing is that I think a lot about what industry or sector can help me bring more value. How can I apply my knowledge, my know-how in digitalization, in technology to that particular sector? I think agriculture is a nurturing tribe for a lot of innovation, and as an industry, it’s still less unified compared to other industries. As an agricultural country, I think we can do more.

In terms of digitalization, how can we make agriculture much more efficient and effective? I’m really curious about how we can use technology to improve farmer welfare. So right after college, I started to really dig deep into the industry, and I still have challenges and opportunities as well.

Paulo J: I think it’s great that you’re able to find what people sometimes call their life’s mission or what they’re meant to do. It’s going back to your roots, not necessarily doing something completely new.

And for Bayu, as I mentioned earlier, you’ve been with a couple of different tech companies in Indonesia. So you’ve seen big companies and startups. What made you decide to join L of RM as a product manager and chief product officer?

Bayu P: I think it’s due to my experience, from a professional standpoint. You mentioned that I’ve been quite adventurous in my career, testing all of the industries, from retail to e-commerce, to FinTech, to media, and then to a big company like Grab, a super app.

It’s challenging for me as an experienced product professional in a sector that is still quite wild and uncovered, not effectively untapped with technology. So it’s fairly challenging for me from a professional standpoint. I want to challenge myself.

The second reason is about the market. You mentioned that Indonesia is one of the biggest agricultural companies in the world. But the reality is that our smallholder farmers are still underprivileged and the most vulnerable factors in the whole supply chain of the food that serves our table.

It’s discouraging for us to leave the farmers behind. So we have to do something as professionals. The market is very massive. I think my personal mission comes into play at that point, and the ecosystem right now has no single player of agritech that is leading the market. So the opportunity is still huge, and the market is still vast. It’s a combination of professional and social impact and business opportunities that really encouraged me to join.

So when I first spoke with Bayu, the CEO, he was really passionate about the company, and that made me very convinced to join and help the team grow the company even bigger and make a greater impact together.

“You mentioned that Indonesia is one of the biggest agricultural companies in the world. But the reality is that our smallholder farmers are still underprivileged and the most vulnerable factors in the whole supply chain of the food that serves our table…The market is very massive. I think my personal mission comes into play at that point, and the ecosystem right now has no single player of agritech that is leading the market. So the opportunity is still huge, and the market is still vast.” – Bayu Adi Persada

Farming-as-a-Service: Elevarm’s outside-in, holistic ecosystem approach to uplifting farmers

Paulo J: Yeah, I think there are really inspiring stories, but also very different stories as well, of how you guys got into Elevarm. Hopefully, for those listening out there who are in Indonesia or maybe Indonesians who are living in other countries and maybe thinking about coming back home, this will inspire you as well.

I wanted to go back to that number that I think Fabi mentioned, which is 15 million smallholder farmers — I think you mentioned 30% of the workforce.

And so you guys are tackling a pretty unique aspect of agriculture. When we talk about agriculture, what often comes to mind is marketplace fresh produce, farm-to-table. But you guys are tackling the off-stream side, right? You’re really focusing on the farmers. And you do that through four areas. There’s agri-business advisory, tackling the pain point earlier that you mentioned about limited knowledge about modern farming. You also have on-farm facilities.

You guys obviously also build tech, digital solutions, IoT, all that, and you’re also digitizing or really mapping out digitally all these smallholder farms across Indonesia. Maybe one of you guys can walk us through what each of these areas mean.

Why you’ve decided to focus on these particular areas and how they contribute to L Arm’s becoming a sustainable business.

Febi A: As I mentioned, there are several gaps that have been faced by smallholder farmers in terms of capital access, access to knowledge to market, and high-quality input. Those are the four major problems that have been faced by smallholders.

So in order for us to tackle all those problems, we deploy an ecosystem approach where we build clusters. In each cluster, we build an ecosystem that consists of on-time facilities. So we leverage the power of being present right in the heart of the farming area through on-facility, which we call AgriPoint.

So that’s one of our facilities, which provides high-quality active inputs to post-solutions marketing, good solutions, access to uncomplicated financing, and of course, a knowledge center as well for small projects. And over time, the kind of facilities that we built within the cluster has also evolved, including currently building nurseries, partnering with local growers as well to build seed-link centers, etc.

So it’s bottom-up problem discovery and also solutions that we deploy with each cluster. And the other part of the ecosystem is that we help farmers and advise farmers who are farming in agribusiness advisory. So in this area, with access to technical assistance, farm training, advisory services, we actually deliver it for free.

But the goal of this service is to improve the quality of output, reduce risk, and ensure that the productivity of funds is optimized through input management and timely harvest. In addition, we also provide business advisory as well to farmers, improving their business equipment, financial literacy, and market intelligence.

That comes with the on-facility within the ecosystem. We also equip our ecosystem with digital solutions. So we provide our internal team with five digital solutions. We’re about to launch the app to our internal team first, and then second, we want to empower and equip the other stakeholders within the ecosystem through this app.

So this app consists of several agronomic practices that can be used by our team and also by agronomists — market information, supply management, basically anything relevant information. So it helps our team and also everyone in the ecosystem to make informed decisions about their farming operations.

Farm digitalization has always been our goal. So we hope to enable farmers to thoroughly track their land, their farming practices, and their business operations. In the future, we can imagine [greater] digitalization. We can have 360 degrees of data, including farmers’ farming habits, farmers’ production, market volatility dynamics, etc. So by digitizing their operations, they are in a better position to meet marketplace demands as well.

They can attract more premium pricing and prepare overall financial literacy and ultimately leading to increased farm sustainability and profitability. So I think those four types of solutions are embedded within an ecosystem that we provide to farmers within each cluster.

Paulo J: I think it’s really holistic, right? So for Bayu, I had two follow-up questions regarding what Fabi just shared. The first is how do you prioritize the development of these different aspects? It seems like a lot to juggle, but at the same time, you also want to prioritize the right things that your farmers need at any point in time. The second question is, from a product perspective, what are you most excited about within this ecosystem?

Bayu P: So, as I mentioned earlier, farmers are at the center of the ecosystem. However, in reality, Indonesian farmers face more challenges in adopting technology. 

First, there is the issue of welfare. I would say that 60 to 70% of our farmers are still living below the poverty line. They are struggling to meet their basic needs and to purchase technology. 

So, the first step is to intervene with all the operations of their farming operation to increase productivity so they can generate more income. This will help them become more self-sustaining and improve their families’ welfare. 

Additionally, the technology infrastructure in our operational area is not always reliable. For example, the signal is often lost, which is a challenge. Moreover, digital literacy is also a barrier to technology adoption within our farmers’ profiles.

Our interventions come from the ecosystem first, from the outside to the inside. If we just build a farmer’s app, it would not meet their needs. Therefore, our priority is to empower our internal teams, our agronomists, our business leaders, and our operation teams with technologies so they can be the advisory role of the farmers. 

The farmers do not directly interact with our tech. Our tech is brought by our teams. We also empower the buyers with technologies. Our trader alliance has a significant proxy to the market. They can identify the demand earlier than the supply so they can help us make the supply-demand well. That is our approach.

There are many challenges and problems in the agricultural area. Our first step is to empower ecosystems so that gradually the farmers’ welfare can improve. Hopefully, the farmers can adopt the technology by themselves within a shorter period of time, say one or two years from now. They can use it independently and interact with our stakeholders much more efficiently. That’s the approach.

Regarding the second question, what makes me most excited is that there are no leading players in agritech in this sector. That means there are so many opportunities that have to be untapped and unlocked. We are very focused on what we do. 

We are focusing on the top quartile products. We are not shifting our minds into more agnostic or opportunistic areas in the market. We are heading towards only focusing on chili, potatoes, shallots, cabbage, and only go to those five because those five reflect 60% of our raw produce markets in general. 

We are covering end to end, not just on the trading side, but also on the pre-production side. That means providing input, providing seeds end to end. Then we want to empower every single process with technology.

We talk about technology, and this is very massive. I think an hour-long session would not be sufficient. But the excitement comes within the persistent gap between the technology opportunities and also the reality at this point. 

There is a lot to fill, and also the business opportunity. That’s why we are building an app for our internals with AI support and also the IoT part. The objective and end goal are to be the proper three technologies that can be scalable to other regions, areas, and demographics. I would say farming as a service.

Paulo J: I think there are two interesting points from what you just shared. 

One is a lesson on digitalization, especially in traditional industries or rural areas, which is to not sell the technology right away but to actually have the people around your target market use the technology first. 

By doing so, you help them prepare to eventually use technology themselves when they are in a better position to do so economically and from a behavioral standpoint as well. 

The second point, which I found interesting, is that you really focus on specific crops. So when you talk about agriculture, it’s not just about hit or miss or let’s try to help whichever type of farmer. 

Instead, you focus on the types of crops that would actually benefit them long term and which are in high demand in terms of the market. So really focusing on that is really interesting.

And then maybe leading into my next question, I know you’ve shared a couple of numbers already in the previous questions, but in terms of Elevarm’s progress so far, maybe you can share what are the three key numbers for our listeners to take away in terms of how Elevarm has made progress.

I know this is a long journey to get to that holy grail of digitalization, but so far in the past 15 months, as Febi mentioned, how has Elevarm done in terms of this journey?

Febi A: Now we have been able to expand our services in the 19 clusters in Indonesia, and we have more than 10,000 registered farmers within our ecosystem. 

In terms of land under management, we actually have more than 3,000 hectares of land registered in our database, but we are currently actively supervising and managing around 250 hectares of land under management.

So I think those three key numbers in terms of the farmers and land that we’ve been able to manage within this short period of time are noteworthy.

“Farm digitalization has always been our goal. So we hope to enable farmers to thoroughly track their land, their farming practices, and their business operations. In the future, we can imagine [greater] digitalization. We can have 360 degrees of data, including farmers’ farming habits, farmers’ production, market volatility dynamics, etc. So by digitizing their operations, they are in a better position to meet marketplace demands as well. They can attract more premium pricing and prepare overall financial literacy and ultimately leading to increased farm sustainability and profitability.” – Febi Agil Ifdillah⁠⁠ 

Launching Elevarm’s first sustainability and impact report and key insights into Indonesian agriculture

Paulo J: You mentioned the impact report earlier, so I wanted to discuss that topic. Many companies, not just tech startups like yourselves, but other firms, are putting out sustainability reports these days.

So I want our listeners to understand why this sustainability report is important for Elevarm’s ecosystem. I’ve already had a look at the report, and I have helped to put it together. I noticed there are many different stories in the impact report. Can you share the story that touched your heart the most or that you thought was most impactful?

Bayu P: I appreciate the help, Paulo. Sustainability and impact are at the heart of what we do. When we discuss AI and agriculture, we always focus on farmers. 

In Indonesia, the majority of smallholder farmers still live below the poverty line. So we’re not just talking about businesses; we’re also talking about impact and the environment. We talk about agriculture, and traditionally, agriculture has been hampering the environment and compromising sustainability. 

We are very conscious of this matter. That’s why we released the impact report and soon the sustainability report. We want to show the world that what we do is specifically impacting our ecosystems. 

Yes, we’re still small, we’re still young, barely one and a half years old as a company, but the impact and sustainability focus that we have is what makes us content and proud of what we have achieved together as a team.

Regarding what touched my heart, there are many things. As I mentioned before, 70% of our farmers were living below the poverty line. After Elevarm, the number reduced to 20-ish percent to 50-something percent. 

So what we did, what we achieved together with the farmers, specifically affected their livelihoods and their families in general. Not only did it improve their living conditions, but it also improved their productivity. On average, the productivity of the farmers increased by 50%, resulting in 40% of incremental income. 

We also focused on empowering women farmers, although we still have homework here. Currently, only 7-8% of our farmers are women, which is still low compared to the national benchmark. However, we’re quite content with the fact that we have 14,000 women farm laborers in our ecosystem. By no means is this a lot, but it still gives power to our women to provide for their families. This number is still giving us encouragement that we can do better in the future. We want to double or even triple the number of women farm laborers this year.

On the topic of young farmers, farming is not a very attractive job these days, right? Most young people want to be YouTubers or TikTokers because they think they can make a lot of money. But this will increase risk in the ecosystem itself, in the local ecosystem where only senior farmers are doing the job. Who will take care of the land after the seniors have done the job or are retired? 

This has also been of interest to Elevarm. Currently, 20-28% of our farmers are still young. This number has increased by 30% from before, thanks to Elevarm’s intervention. We can make farming great again. We can make farming attractive again for young farmers. 

Hey, it’s not only YouTube or TikTok out there. This is also a promising business for you and your family. I can mention a lot more on this topic, but I think those things are making us proud of what we have achieved together as a team.

Paulo J: Definitely a lot to be proud of despite being a young company. Febi, do you have anything to add in terms of what has really touched you in terms of the work that you’ve done so far?

Febi A: A real example comes from a farmer here in Magelang, a city nearby Yogyakarta area in Central Java. Before she usually received payments after several days or even weeks, or she didn’t get the payment at all from the traders. 

But after we built an ecosystem there, partnering with what we call Traders Alliance and also adding more stakeholders to our ecosystem, we can now buy harvest directly from her with direct cash the day after she drops off her produce. 

She also said that she received a fairer value for her crops and that the deduction is 40% less than traditional middlemen. So I think those are tangible impacts that we bring into an ecosystem where we’re at, one of them being building connections with the farmers there.

Aside from that, it’s also about business connections. In each cluster, we want to make sure that everything is done transparently and that they can receive or get their benefits by joining our ecosystem right away. That’s the key message and value that we adhere to in every cluster.

“Farming is not a very attractive job these days, right? Most young people want to be YouTubers or TikTokers because they think they can make a lot of money. But this will increase risk in the ecosystem itself, in the local ecosystem where only senior farmers are doing the job. Who will take care of the land after the seniors have done the job or are retired? This has also been of interest to Elevarm. Currently, 20-28% of our farmers are still young. This number has increased by 30% from before, thanks to Elevarm’s intervention. We can make farming attractive again for young farmers.” – Bayu Adi Persada

Paulo J: And it’s all related because if you’re able to prove that farming is a profitable business for a single farmer, then that would attract more people to consider farming as a profession, especially if they live in an area that is suitable for it. In China, it was pretty popular where farmers were doing TikTok and YouTube as well. So maybe, if you still want to do TikTok and YouTube, you can still do it while running your own farm. And maybe it might even become more viral.

Our conversation continues in episode 131, where Febi and Bayu dive into Elevarm’s view of the future of agricultural technology in Indonesia and their place in it. They also share their approach to being tech leaders in an industry where tech digitalization, as we have learned so far, is not so straightforward. Follow us on Spotify, Apple Podcasts, or YouTube to get notified on the continuation of our call with Febi and Bayu and look forward to having you dial in!