Building Chickin: From farm to industry leader

Chickin began with three college friends sharing smashed fried chicken, an Indonesian regional cuisine called ayam geprek, and a passion for creating a real, positive impact in Indonesia: Tubagus Syailendra, Ashab Alkafi, and Ahmad Syaifulloh Imron.

Starting as small-scale farmers, they were quick to recognize the inefficiencies in the poultry sector. From maximizing yield to addressing supply-demand mismatches and enhancing operational excellence, they saw firsthand the opportunities for innovation.

As the largest Muslim nation in Southeast Asia, Indonesia relies heavily on chicken as a primary source of protein. However, there is an intricate and multi-faceted relationship between climate change and poultry farming. “Climate change and agriculture are interconnected and interrelated. It is a cycle with cascading effects, ” Tubagus explains.

A critical input for poultry farming is feed production, which relies on crops like corn and soybeans. Climate change causes inefficiencies in crop productivity that lead to volatile chicken feed prices, impacting poultry farmers’ operations and costs. Moreover, chickens themselves contribute to climate change by releasing methane and ammonia gasses from their waste. These emissions exacerbate global warming, worsening the quality of the environment in which chickens live. Rising temperatures and altered weather patterns directly impact the health and well-being of chickens, further complicating the challenges faced by poultry farmers.

For these reasons, Tubagus and his co-founders established a vision for Chickin to bridge the gap in protein accessibility and promote health in Indonesia through innovation and sustainability.

“Back when we were farmers, maybe because we were young, we had a spirit of innovation. We did research, talked to lecturers and fellow students, and tried to implement all our research on our own farm. From that process, the product that we built was the IoT device. In 2017, we had this big, ugly black box that we put in the cages. That was our MVP,” he laughed.

From MVP to final product

“The most important thing in the agriculture sector is how we manage the community. Our goal wasn’t solely about achieving a billion-dollar valuation. We chose to focus on how to create impact and make that impact sustainable, and that opened up the right path forward,” said Tubagus.

With this mindset, the founders knew they had to build community engagement before monetizing. They created Chickin, a community base for poultry farmers, which was built via WhatsApp to connect and share knowledge. This community served as a testing ground for Chickin’s IoT technology, which has since evolved into the Chickin Smart Farm. This system utilizes IoT to remotely regulate cage climate, enhance livestock living conditions, and streamline data collection for improved performance tracking. By optimizing input efficiencies, such as feed and electricity use, Chickin Smart Farm increases profitability for chicken farmers.

Tubagus underscores the role of mindset in exploring different paths to profitability. Initially, Chickin ventured into trading, but as their ecosystem continued to grow, they gathered more data through the IoT technology, which reveals multiple ways they can make efficiencies from upstream to downstream.

“It turns out that our IoT was just an entry point when we first saw this as our ultimate goal. Since then we realized that the ultimate goal should be to provide the best possible improvement to farmers. With our network, we can identify the ‘where’s and ‘how’s,” he said.

Now, Chickin Fresh distributes chicken meat directly from farmers, frozen or fresh, catering to business needs. Chickin’s chicken meat product quality is safeguarded and adheres to market standards in terms of freshness, safety and taste through the streamlining of the value chain. Additionally, Chickin offers financing and facilitates B2B sales with data transparency, addressing supply-demand mismatches.

Overcoming skepticism and leveraging competitions

Challenges emerged when courting investors. “No one believed in the idea. We kept getting rejections from investors because they thought we would have to compete with existing industry players, the big guys.” Tubagus laments.

However, Chickin saw an opportunity in untapped markets, where the value chain was still fragmented. It was a matter of proving this to investors.

Overcoming investor skepticism required strategic storytelling and balance sheet adjustments. “We appeared like a trading company with a heavy balance sheet,” Tubagus recalls “So we leveraged technology to score stakeholders. It enabled us to provide financing and made the balance sheet leaner.”

Tubagus asserts, “Our growth in 2022 was 19 times in a year, proving market fragmentation. We’re not competing with industry giants; we’re complementing their ecosystem.” As a feed distributor, Chickin fosters collaborative partnerships with major players. Tubagus explains, “We manage farming operations, offering bargaining power to major players. By distributing feed and streamlining operations, we empower farmers and strengthen industry collaboration.”

Chickin successfully raised Seed funding from East Ventures and other investors in 2022, but throughout the journey, competitions became jumping boards for Chickin to secure funding, resources, and, most importantly, validation. “We participated in competitions many times. Our initial capital was Rp 3 million or US$185, but the total funding we received through competitions reached Rp 200 million or US$12,425. We put everything into our working capital to build our product and technology.” said Tubagus. These experiences enabled Chickin to magnify its impact and scale its operations exponentially.

For all innovators drawn to the entrepreneurial path like Tubagus with Chickin, East Ventures and Temasek Foundation are thrilled to present the Climate Impact Innovations Challenge (CIIC) 2024, following its success in 2023.

This year, Sustainable Agriculture is highlighted as one of the three main focus areas (tracks) of the competition. Innovators are welcome to present their ideas by applying to CIIC before 4 June 2024 to get the chance to win a total prize pool of Rp 10 billion to pilot their projects in Indonesia.

“Tech founders often overlook the importance of understanding the local context. Dive deep into the problem, and immerse yourself in the local knowledge. Feel what it’s like to be a breeder, a farmer. Don’t make excuses; pivot when needed to ensure your product truly addresses the problem. In sectors like tier 2 and tier 3 cities, relying solely on data and research won’t cut it. You must be agile, mobile, and willing to navigate through obstacles. Otherwise, you’ll remain invisible to the real issues at hand.” Tubagus concluded.

If you are a startup founder building in the agritech sector, send us your pitch here.