Setting sail for blue economy: Opportunities and challenges in building a maritime startup
The maritime industry has tremendous potential for growth and development. It is a complex sector that encompasses a wide range of activities, including shipping and logistics, fishing, and aquaculture. According to UNDP, the industry also plays a critical role in the world economy, accounting for 5% of global GDP, or estimated at US$ 3 trillion per year.
On 1 March 2023, Aruna’s Co-Founder and CEO, Farid Naufal Aslam had shared his experience in building the marine-focused startup at the launch of the Climate Impact Innovations Challenge by East Ventures and Temasek Foundation.
We have a chance to interview him on how Aruna has developed the market, the big opportunity of the blue economy and what solutions that we can address in developing Indonesia’s marine industry.
Creating varied markets and commodities for sustainable fisheries
Aruna runs the initiative by connecting small-scale fishermen in Indonesia and overseas importers directly through its app and website. The company focuses on coverage numbers to ensure a consistent supply side to customers, both in the local and the global market, improve fishermen’s productivity and provide sustainable ways.
Aruna has covered more than 190 locations and almost 50,000 fishermen in the form of hubs where the fishermen make their transactions in fishing or fishpond villages. Product diversification is one of Aruna’s ways to add more commodities to the market, distribute and launch value-added products, and control market share in several commodities.
The goal is to make Indonesia the global maritime axis by reinventing the fishery supply chain, increasing financial inclusion, and applying sustainable fisheries.
A gold mine for maritime country
Indonesia consists of over 17,000 islands and has a coastline that stretches over 54,000 kilometers, making it the largest archipelagic state in the world. Indonesia’s fishery is also ranked third as the largest producer in the world.
However, the export value is not even in the top 10. There is a large gap between the production and optimization. Thus, there is an enormous opportunity since the industry is so underserved that even incremental changes will generate economic value in this sector.
For instance, Farid highlights on the fish waste management in the fishing industry. Currently, the post-harvest losses in this commodity are about 43%, because not every part of the fish or any other sea products are being optimized. The rest will be wasted or have a lower value. In the Aruna Hub at Bangkalan, the company tries to process not only the crab meat for the customers, but the shells are rendered to be powder and processed to be the fish feed. By optimizing the fish waste management, it will double the stocks in the industry.
Second, the maritime sector is a global industry, which means that startups in this field can reach a wide audience and have a global impact. Profitability is an implication that will happen in this underserved sector because the efficiency value is getting higher. “The demand is huge, and we do not burn money so that maritime startups can present greater opportunities,” said Farid.
Challenges and Aruna’s tips for potential marine startups
According to Farid, there are several challenges ahead in the marine-focused startups, however he highlights the solutions that Aruna tried to address.
The most significant challenge is the human resources, including attracting and retaining skilled workers, addressing the aging workforce, and promoting diversity and inclusion.
The different cultures in various islands also becomes another challenge as it may be difficult to approach the community and generalize solutions at times. Therefore, Farid suggests the startup firm needs to bring a different approach in each region, despite the same solution. “The way we engage the community and how we preserve the environment are the most important things to ensure the community’s involvement in our program,” said Farid.
Additionally, most fishery processes are still very traditional. Aruna found that fishermen still dive without proper equipment and catch fish without appropriate fishing gear. This results in lack of efficiency. “We need to educate and digitalize fishermen to increase productivity. The efficiency will increase once they adopt more advanced and environmentally friendly tools,” said Farid.
Infrastructure development is also crucial to supporting the maritime industry, especially navigation infrastructure including lighthouses, radar systems, GPS, and other technologies that help ships navigate safely and efficiently. For example, electricity may not be available in every area at certain hours. Farid believes it is a matter of time as the government has gradually focused on developing electricity and data networks.
Starting a maritime industry startup can be a challenging but an exciting endeavor. The maritime industry is also ripe for disruption, and innovation is key to success. Look for opportunities to introduce new technologies or processes that can help you stand out from your competitors.
For startup founders, Farid emphasizes not to be afraid of collaboration. Being competitive is important yet there are also complementary solutions. With the right mindset, team, and strategy, founders can build a successful business through the impact.
Another tip is that increasing the collaboration between the private and public sectors can also help to support the growth of the maritime industry by providing funding, supporting research and development, investing in infrastructure, developing talent, and promoting the industry.
Overall, the maritime industry has enormous potential for growth and innovation and it is a sector that will continue to play a critical role in the global economy and society. Improving production efficiency requires a holistic approach that involves optimizing processes, reducing waste, and investing in training and development.
Having this in mind, East Ventures and Temasek Foundation offer a unique opportunity for climate innovators out there to join the Climate Impact Innovations Challenge. Entrepreneurs can present their innovative and creative ideas to help tackle issues such as renewable energy, mobility, food and agriculture, and ocean.
Learn more about the Climate Impact Innovations Challenge here.