How Aruna plugs Indonesia’s 12 million fishermen into the global market
Published on September 24, 2022
With around 12 million fishermen, Indonesia is the second-largest fisheries producer. In recent years, the sector has contributed approximately US$27 billion annually to the nation’s GDP. It creates roughly US$4.1 billion in annual export earnings and supports millions of adjacent jobs.
However, due to the country’s diverse demographics and geography, the fisheries industry is highly fragmented with most of its self-employed fishermen living in poverty. Meanwhile, fishing communities, especially small ones, are routinely forced to cope with fluctuations in demand and price instability.
To address these gaps, three entrepreneurs got together to launch Aruna in 2016. Today, the startup is Indonesia’s largest integrated fisheries commerce platform.
On a recent episode of the Indonesia Digital Deconstructed hosted by Michael Soerijadji of AC Ventures, Farid Farid Naufal Aslam, co-founder and CEO of Aruna, shared more about Indonesia’s fishing industry, its scope, and opportunities.
How is Aruna helping Indonesia’s fishermen?
Farid and his co-founders launched the company when they won a hackathon shortly after college graduation in 2016. Though Aruna has been around for six years already, the company is just getting started.
In July 2021, Aruna announced its series A funding of US$35 million. AC Ventures participated in the round. It marked the largest series A investment in Indonesia’s agritech and maritime sector.
Aruna serves as an end-to-end, digital supply chain aggregator for Indonesia’s small-scale fishermen. Farid mentioned that much of the demand it creates for micro-entrepreneurs on its platform comes from overseas.
“We provide the fisheries community with a reliable collection system. We’re building a community hub for easy and efficient storage and processing of fish. We also help carry out the fulfillment and distribution of the products from our hub to the customer warehouses directly. We are currently focused on B2B customers, such as enterprises, food distribution companies, and food services companies – overseas as well as in Indonesia,” explained Farid.
Aruna cuts out the industry’s traditional layer of middlemen by sourcing products directly from fishermen. This allows the company to offer fairer and more transparent pricing while capturing a high margin.
Speaking about the size and scope of the seafood market, Farid said not many people realize that the industry is actually quite big globally.
Research suggests that the global fresh fish market size stood at US$228.3 billion in 2021 and is estimated to grow at a CAGR of 2.6% from 2022 to 2028.
Farid explained, “When it comes to Indonesia, the scope of this industry is massive. With over 60% of the population living in coastal areas, fishing is mainstream here. We have significant scope to grow and scale within the country and across the region.”
From a conservation perspective, Indonesia’s fisheries are also of global importance. The country’s waters support more than 3,000 species of bony fish and more than 850 sharks, rays, and other unique species. But overfishing is a major problem in Southeast Asia.
With this in mind, Aruna seeks to pave the way for a more sustainable future on the country’s coastlines. It uses trackers and technology to monitor the fishing activities of its participating fishermen. This allows Aruna to advise fishing communities on which specific areas are being overfished so fishermen may then allow those areas to replenish themselves. This practice has a direct impact on the long-term sustainability of each coastal community where Aruna is present.
In this way, when fishermen join Aruna, they go beyond mere transactional value and are able to contribute to the long-term livelihoods of their villages.
In the context of sustainability and mitigating overfishing in Indonesia, Utari Octavianty, Aruna’s co-founder and Chief Sustainability Officer, said earlier this year that the startup is also building infrastructure to support sustainable fishing practices. She said Aruna’s team believes that profitability should be achieved through balancing the needs of both people and the planet.