Gibran Huzaifah Amsi El Farizy, now a popular name in the start-up world, began his fish-rearing business as a college student. By the time he graduated, he was managing 76 ponds.
Now at the age of 33, he runs eFishery, an Indonesia-based startup which develops products like automatic feeders that help farmers involved In the seafood business to save costs whilst improving productivity.
His agritech startup, backed by investors including SoftBank Group Corp and Temasek Holdings Pte, is set to score about $100 million in fresh funding, according to people familiar with the matter. Negotiations are ongoing and the size of the round could still change.
The idea was brought to life solely when Farizy was attending an aquaculture class in his third year at Bandung Institute of Technology in Indonesia. “My professor mentioned that over the next five to 10 years, five-star hotels and restaurants will [serve] fish or catfish, whether you are taking part in it or not,” he mentioned to CNBC Make it. It is then that he shifted his path to catfish rearing.
Soon after, Farizy went ahead and rented his first catfish pond in order to supplement his income. The profit he made from selling catch to middlemen did not suffice, due to which he began selling catfish fillet as well as fish and nuggets which he sold via a food cart at his university.
“I tried to create my own demand by having a value-added product,” Farizy said. He also stated that he skipped his classes to operate his business in the university, which led him to grow up to seven food carts.
Post the breeding of catfish, he realised that feeding costs which were substantial consisted of 70 to 90 percent of the total costs. He then built a prototype for an automatic feeder in 2012, that eliminated feeding costs by 28 percent.
“What many companies got wrong is that they never focused on the unit economics since day one,” Farizy told CNBC. The automatic feeders went on profit sales from the very beginning.
Farizy claims that eFishery has been a success from the start. "We don’t burn cash unnecessarily,” he said, adding that his firm is very prudent with its expenditure.
Cash burn essentially means the spending of cash reserves by a company when it is not even generating any profit yet.
Farizy says that he does not believe in customers using their products for free, a step that many startups take in the beginning to expand their customer base.
“We didn’t sell the feeders for free. We sold them at a markup of our cost,” he stated. “I remember vividly that we tried to provide the feeder for free. Even if we tried to pay farmers to use it, they didn’t want to use it simply because they have been farming for 20 years to 30 years, and they are not convinced to use this technology,” said Farizy.
His big break took place when a farmer owning 1,000 ponds asked eFishery to install multiple feeders in some of his ponds.
Today, eFishery serves close to 60,000 farmers and about 280,000 ponds, making it one of the largest startups in the industry.
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