As of August 2023, Indonesian government has disbursed funds totaling Rp 37 trillion (US$2.4 billion) for food security programs. Indonesian venture capital (VC) firms are turning their attention to agriculture and food start-ups as the global confluence of the El Niño climate phenomenon and growing protectionism put pressure on food supplies.

VC firms saw start-ups in agriculture, farming, fisheries and related industries as potential targets for investment in 2024. He also pointed out that the rise of climate technology and energy tech start-ups, though nascent in Indonesia, also reflected this broader trend, adding that today’s climate condition is squeezing global food systems, leading to hunger, malnutrition and economic stresses.Food sustainability is now a big theme.

Indonesia witnessed its own agrifood tech boom in 2022, attracting US$376.75 million in private funding. The industry is “highly fragmented for business to business [B2B] buyers”, aligned with its pursuit of profitability. 

The agriculture sector is also the third largest contributor to Indonesia’s gross domestic product (GDP), implying that the sector holds significant potential in the country’s economy after trade and manufacturing, comprising about 12.4 percent in 2022, according to Statistics Indonesia (BPS). Solving food production problems is important for Indonesia, as food, beverage and tobacco contributed 1.60 percentage points of the 2.61 percent of total inflation, equivalent to 60 percent of the monthly inflation rate.

This article was published in thejakartapost.com with the title "". Click to read: https://www.thejakartapost.com/business/2024/01/02/local-vc-firms-eye-agriculture-food-tech-amid-tightening-global-food-security.html.