The green pastures of SEA’s agritech landscape

This week’s On the Rise analyzes SEA’s agritech space, SoGal Ventures’ female-founder approach, and an AI firm focused on enterprises. [Read from your browser]( On the Rise 🚀 Welcome to On the Rise! Delivered every Tuesday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in emerging tech. If you’re not a subscriber, get access by [registering here](. Written by Collin Furtado Journalist Hello {NAME} As a child, I recall my grandfather haggling with a large man wearing a thick gold bracelet over the selling price of a crop of coconuts that had recently been harvested from our farm in south India. I was worried as this man was nearly twice the size of my grandfather - I remember thinking that he could easily beat my elderly grandfather to a pulp. The large man was an agricultural distributor - commonly known as a middleman - who bought crops from smallholder farmers like my grandfather. The heated negotiations ended with the harvest being sold for one-tenth of the price the coconuts would fetch in the market. My grandfather was in a foul mood for the rest of the day. Similar to India, Indonesia’s agricultural supply chain is riddled with middlemen. There are [up to 13 layers of middlemen]( in the country with each taking a 10% to 20% cut, leaving farmers with the lowest income in exchange for the greatest effort. This large gap between farmer and end-consumer is one reason for the rise in agritech startups in Indonesia. The archipelago has more agritech firms than all other nations in Southeast Asia combined, my colleague Shadine reports in this edition’s Big Story. The story highlights the extensive players in the region’s agritech space. The industry has definitely caught the attention of investors - they pumped in over 2.5x more funding in agritech startups last year compared to 2021. The number of deals have also doubled over the past year. Speaking of investor attention, SoGal Ventures co-founder and managing partner Pocket Sun tells my colleague Melissa why investing in minority- and female-founded startups makes good business sense. And she’s walking the walk - 95% of the startups in SoGal Ventures' first fund have at least one female co-founder and eight of its investments raised “up” rounds in 2022. In this week’s AI Odyssey, I showcase a generative AI firm that is looking to build a sustainable business model by targeting enterprise customers. More on that later, but first, our Big Story. -- Collin  --------------------------------------------------------------- THE BIG STORY [The key players in SEA’s agritech space]( The region’s agritech industry attracted over 2.5x more investment with funding deals in the sector reaching an all-time high in 2022.  ---------------------------------------------------------------  MAKING WAVES [Investing in women founders is good business, says diversity-focused SoGal Ventures]( Of the startups bankrolled by SoGal Ventures’ first fund, which had eight “up” rounds in 2022, 95% have at least one female co-founder.  --------------------------------------------------------------- AI ODYSSEY Promising AI projects we’re noticing.  A generative AI that means business The world of generative AI seems to be growing every day with new players looking to launch their own chatbots. A few weeks ago, we saw a [host of Chinese players]( - including Baidu, Alibaba, and Tencent - firming up plans to launch their own AI bots. While Microsoft-backed OpenAI and Google’s Bard attracted investors and a massive general user base, there have been [several questions about the huge costs]( of their use, especially in the integrations with search engines. Analysts expect Google to see a US$6 billion rise in expenses by 2024 if the company’s AI bot was to answer half of its search queries. This is due to an AI-assisted search costing about 10x more than a standard search request, which will reduce profit margin significantly. This is why players like Canada-based [Cohere]( are looking to build a more sustainable business model by targeting enterprise customers. The company is planning to launch a generative AI chatbot and is already in talks with marketing, consulting, and tech companies to incorporate its offering. Taking a shot at OpenAI and Google, Cohere CEO Aidan Gomez [told Reuters]( that the company doesn’t plan to open its chat models for everyone to use for free, as it is looking to build “a healthy and sustainable business.” The firm has a [foundation model]( like OpenAI and Anthropic, and it is trained on large sets of data and can perform a variety of tasks. Cohere has listed three products in its website: Classify, a service that helps in content moderation and analysis; Generate, an AI-powered content writer tool; and Embed, a platform to extract deeper insights. “Sustainable business model” and “generative AI” are the two phrases that are music to investors in this current environment. It’s no wonder that Cohere, which is backed by the likes of Tiger Global and Index Ventures, is [already in talks]( to raise millions of dollars at an over US$6 billion valuation. What’s also interesting to investors is that Cohere was founded by former researchers at Alphabet. It also has a cloud partnership with Alphabet and its language AI will be available on Amazon’s machine learning platform SageMaker. That said, Gomez wants Cohere to stay independent and work with different cloud partners. -- Collin  --------------------------------------------------------------- FYI 1️⃣ [Mapping Malaysia’s government tech entities]( Jobs will be cut if the government decides to overhaul the sector. 2️⃣ [Sense checking for product-market fit in 2023]( Startups seeking funding amid this year’s tough economy should take a look at product-market fit in a fresh light.  --------------------------------------------------------------- NEWS YOU SHOULD KNOW Also check out Tech in Asia’s coverage of the emerging tech scene [here](. 1️⃣ [All investment in good health]( B Capital Group closed its first healthcare fund at over US$500 million. 2️⃣ [Time to take a TikTok break]( The platform is putting a screen time limit of 60 minutes per day for users under 18. 3️⃣ [PropertyGuru trims losses by 81% in Q4 2022]( The company’s marketplace revenue grew 15% to US$28.2 million in the same quarter. 4️⃣ [Streaming platform for Muslim children]( Malaysia-based Durioo+ has raised US$2.9 million in seed funding in a round led by Y Combinator and Gobi Partners. 5️⃣ [A breath of fresh air]( Japanese climate tech startup Asuene has secured US$1.1 million in series B money. It's raised about US$22.8 million in total for the round.  --------------------------------------------------------------- That’s it for this edition - we hope you liked it! Do also check out previous issues of the newsletter [here](. Not your cup of tea? You can unsubscribe from this newsletter by going to your “edit profile” page and choosing that option in our preference center. See you next week! [ADVERTISE]( | [SUBSCRIBE]( | [HIRE]( | [FIND JOBS]( P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? Switch to a different frequency or get new content through our [preference center]( or [unsubscribe](. You can also break our hearts and remove yourself from all Tech in Asia emails over [here](  Copyright © 2023 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894