Southeast Asia Agritech: Industry Players & Value Chain, Digitization and Mechanization & Livestock vs. Crop Farming Agriculture - E343

Adriel Yong, Head of Investments at Ascend Angels, and Jeremy Au discussed three major topics:

1. Southeast Asia Agriculture: Jeremy and Adriel talked about the variety of agriculture players, from smallholders to large conglomerates, and the range of crops cultivated, including staples like rice and cash crops like palm oil. Jeremy pointed out that understanding agriculture requires consideration of geography, market players, and crop types, noting that this sector is significantly more complex and boots-on-the-ground vs. well-covered business models like SaaS. They explore upstream inputs, financing, downstream off-take, storage, processing and trading functions. They also discuss the complexity of determining investment profiles suitable for venture capital return targets.

2. Digitization & Mechanization: Jeremy compared the region’s agricultural landscape to the US, where both hardware and software advancements have been implemented. He explained that despite the potential benefits of digitization, the fundamental nature of agriculture requires a physical interaction with crops, which cannot be entirely replaced through digital solutions, and stressed the importance of understanding the practical limitations of agritech. He also discussed the potential of logistics as a fundamental layer in the agriculture sector and pointed out that while there are opportunities for increased efficiency through better maintenance, routing, and time management, the gains might still be limited.

3. Livestock vs. Crop Sector: Jeremy delved into the differences in managing poultry and livestock compared to crop-based agriculture. He explained that different animals require varied inputs and are subject to different risks, and recognized the higher price points for animal products due to their higher energy input requirements compared to plants. He also emphasized the anticipated increase in demand for protein-rich foods as the region grows richer. He discussed the impact of diseases on poultry and fishery yields and shared how to manage these risks, comparing it to an insurance model where consistent monitoring and preventative measures are vital.

They also talked about the role of government support in agriculture, the impact of weather and seasonality on agricultural productivity & asset utilization, and the potential of cultured proteins. 

Watch, listen or read the full insight at https://www.bravesea.com/blog/southeast-asia-agritech

Get transcripts, startup resources & community discussions at www.bravesea.com

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