Based in Bangkok, Freshket simplifies the process of getting fresh produce from farms to tables. Launched in 2017, the startup has now raised a $3 million Series A, led by Openspace Ventures.
Other participants included Thai private equity firm ECG-Research; Innospace; and Pamitra Wineka and Ivan Sustiawan, the co-founders of Indonesian agriculture technology startup TaniHub. French-Singaporean food conglomerate Denis Asia Pacific and Thai family office Seedersclub, who made previous investments in Freshket, also returned for the Series A.
Freshket’s technology includes an e-commerce marketplace that connects farmers and food processors to businesses, like restaurants, and consumers in Thailand. The startup was co-founded by chief executive Ponglada Paniangwet and chief marketing officer Tuangploi Chiwalaksanangkoon, who each worked in marketing before launching Freshket three years ago.
Paniangwet told TechCrunch she wanted to enter agritech because her family has worked in the agriculture business for 25 years. "I grew up learning a lot about what worked and didn't work in the industry," Paniangwet said. "Overall, the industry is tedious, messy and highly manual."
Freshket's goal is to become "an enabler for the entire food supply chain," she added.
Before Freshket, Paniangwet started a processing center, which sources, cuts and trims fresh produce at wholesale fresh markets before delivering them to restaurants and other customers. She realized technology could be used to simplify the supply chain, increasing farmers' incomes and the quality of produce received by customers.
There is also ample market opportunity. According to an April 2019 Euromonitor International report, the food service market in Thailand is worth over $7.7 billion in annual purchases, made by more than 200,000 restaurants (link in Thai).
Chiwalaksanangkoon, who was already good friends with Paniangwet, left her position at one of Thailand’s largest banks to co-found Freshket. The company's platform pull together Thailand's fragmented produce supply chain by bringing together processing centers and suppliers, and connecting them directly with farmers, who usually rely on middlemen. Freshket also provides its users with data to help them predict supply and demand for their crops.
The expenses of operating a delivery business, especially for perishable goods, can be very high. To stay cost-efficient, Freshket itself doesn’t stock fresh produce. Instead, Freshket tells its network, including farmers, how much product they will need to provide on a daily basis, so they can plan their supply chains.
Paniangwet also said the B2B food delivery business has high average order values, fortifying its unit economics. Freshket's order, warehouse and logistics management systems are all linked together and "because of that, we are able to control the flow of goods, limit additional and labor costs and keep our overall cost base manageable," she said.
Freshket's main rivals in the B2B space are traditional supply chain businesses; in the consumer space, it is up against include grocery delivery startups. It competes with delivery apps by offering lower retail prices, since Freshket is already tapped into a streamlined supply chain. For B2B customers, Freshket's selling points include more precise delivery, a wider variety of products and produce gradings.
Freshket's new funding will be used to upgrade its supply management technology. In the future, Paniangwet said the company plans to add more services, like financing, demand forecasting and price matching.
Freshket is among several startups in Southeast Asia markets focused on streamlining the food supply chain in different countries. Others include TaniHub and Eden Farm in Indonesia, Agribuddy in Cambodia and Singapore-based Glife.
This is the third agritech investment Openspace Ventures, which focuses on early-stage companies in Southeast Asia, has made (the other are TaniHub and Singaporean grocery platform RedMart).
In a press statement about the investment, Openspace Ventures founding partner Hian Goh said, "As Openspace Ventures’ second investment in Thailand this year, Freshket reflects our growing conviction in the potential of the Thai market for high quality and innovative startups."