Fresh Factory Receives Initial Stage Funding of 66 Billion Rupiah Led by East Ventures
Cold chain fulfillment solution provider startup Fresh Factory has succeeded in obtaining seed funding of $4.5 million or equivalent to 66 billion Rupiah, led by East Ventures.
This round was also attended by several other investors, including PT. Saratoga Investama Sedaya TBK, Trihill Capital, Indogen Capital, Prasetia Dwidharma, Number Capital, Y Combinator, and several other angel investors.
The fresh funds are planned to be allocated for warehouse expansion to all secondary cities in Java as well as main cities in Sumatra and Sulawesi. In addition, this investment will also be used to strengthen the team and technology to increase adoption and operational achievement of the company.
Founded in 2020 by Larry Ridwan (Founder & CEO), Widijastoro Nugroho (Co-Founder & CCO), and Andre Septiano (Co-Founder & CFO), Fresh Factory recognizes the magnitude of the problem with cold chain logistics in Indonesia.
Therefore, the company is committed to providing a network of hyperlocal cold chain fulfillment centers, transformations, and intelligent fulfillment management systems that enable businesses to store, retrieve, package, and deliver their products to customers better, faster and more efficiently.
Problems in the Field
As a country with abundant resources from agriculture and aquaculture, Indonesia has a need for efficient cold chain logistics for storage and delivery from production centers to customers.
However, there is still a big gap in the distribution circle that only focuses on central warehouses without paying attention to mid and last mile logistics. Fresh Factory wants to bridge this by setting up smart cold storage in multiple locations close to the customer.
Some of the technology solutions that have been integrated into their services include GeoTagging and GeoLocation for storing products in warehouses, Artificial Intelligence (AI) for projection and stock management in warehouses, and Internet of Things (IoT) for monitoring freezer and chiller temperatures.
East Ventures Venture Partner Avin Sugiarto said, “Given the huge gap in cold chain solutions and how it causes various problems related to food loss in the supply chain, we believe Fresh Factory is here as a solution to improve cold chain logistics for perishable food products and help SMEs.”
As of April 2022, Fresh Factory has achieved $10 million annual GMV and annual fulfillment for more than 1 million orders. This was followed by revenue growth of 30% MoM in the last three months.
The company also has more than 20 branch warehouses spread across various cities in Java, Sumatra, Sulawesi, and Bali with frozen to cold storage solutions.
Fulfillment Services in Indonesia
The growth of e-commerce has more or less affected the fulfillment service landscape. Indonesia is currently the largest e-commerce market in Southeast Asia with a contribution of up to 50% of all recorded transactions. This growth marks the major contribution of e-commerce to the digital economy in Indonesia.
Quoted from the e-Conomy SEA 2021 report, Indonesia’s digital economy has increased from USD 47 billion in 2020 to USD 70 billion in 2021, coupled with digital penetration which continues to increase, amounting to 158 million e-commerce users in Indonesia.
Meanwhile, based on a report from Research and Markets, the global fulfillment services market is expected to reach $198.62 billion by 2030, growing at a CAGR of 9.5% over the forecast period.
The fast penetration of internet services and the increasing number of online shoppers are the main factors driving the demand for fulfillment services worldwide.
The maneuver of the country’s e-commerce players to enter the fulfillment business is considered very good by providing integrated logistics services.
This step was first taken by Tokopedia by launching the TokoBranch service which has now been transformed into Served by Tokopedia. The service allows sellers to store products in “smart warehouses” in high-demand areas.