Indonesian poultry startup Chickin has raised a 250 billion rupiah ($15.26m) loan facility from PT Bank DBS Indonesia, which will serve as working capital to support the company’s business operations.
Founded in 2020, Chickin offers integrated solutions for broiler chicken farmers such as Day-Old-Chicken (DOC), feed, chemical drugs, vaccines, and also routine mentoring.
Chickin’s co-founder and chief executive officer Tubagus Syailendra W said the technology developed by the company includes cloud-based software for dashboard monitoring to support farmers in poultry farming, transparency in livestock supervision, poultry farm management tools, and Internet of Things (IoT)-based hardware to optimise the Feed Conversion Ratio (FCR).
“We have been able to improve feed efficiency as well as reduce the mortality rate of livestock. Typically, farmers report a mortality rate of around 6-7%, but we have reduced it to approximately 3%,” Tubagus explained.
On the downstream side, Chickin also processes live chickens into broiler chicken meat and distributes it to companies in different business sectors, including hotels, restaurants, catering services, and the food processing industry. Chickin is a supplier of chicken to over 200 companies across several cities in Indonesia.
Executive director and Head of Mid Cap, Institutional Banking Group at PT Bank DBS Indonesia, Natalia Y. Ratulangi, said Chickin shows strong potential and that its vision aligns with DBS’s mission. “We are enthusiastic about Chickin’s positive social impact through technology, as technology and innovation are key values we actively encourage at DBS,” she told the media.
Ratulangi added that the loan facility for Chickin is part of Bank DBS Indonesia’s offering to mid-cap companies with revenues between 1 and 10 trillion rupiah. In addition to Chickin, Bank DBS has provided loan facilities to other mid-cap companies across various sectors, including manufacturing, consumer goods, FMCG, and more.
Lesson from eFishery
Bank DBS is taking a cautiously optimistic view on the agri sector in Indonesia, said Ratulangi. She said there are significant opportunities in the sector. However, the company is also focused on managing the risks.
The agritech sector has been facing significant challenges, most recently the alleged fraudulent activities at eFishery. In Oct 2022, Bank DBS Indonesia also disbursed a 500 billion loan facility to eFishery. Ratulangi explained that the company couldn’t provide further information on the lender action against eFishery as the case is still in investigation. However, Bank DBS is always cautious in providing lending to its clients by using credit parameters and assessments in their due diligence process.
“We will also learn from cases like this [eFishery] and incorporate that into our processes. We will continuously incorporate feedback from our partners. We are also quite active in this segment, and from that, we leverage our connectivity with clients to understand this segment more deeply. We also have industry specialists for each of these segments,” she said.
With the lessons learned from eFishery, Tubagus explained that the company is now focusing on improving compliance, risk management, and governance. ‘The Indonesian agriculture industry has great potential, but until now, it has been difficult to find a successful startup in this sector due to a lack of proper governance and financial management,” he said.
From the beginning, Tubagus mentioned that they have focused solely on poultry farming, utilising the sector from upstream to downstream. They are not aggressively pursuing growth but instead focusing on becoming a sustainable company with improved positive cash flow. “We are not focused on achieving profit or losses, but rather on how to create a company with a healthy cash flow,” he said. The company has achieved positive cash flow since 2024.
To prevent fraud and mismanagement, Chickin has built a disciplined operations system and financial controls, explained Tubagus. “We are improving our ERP system and data management. We also conduct external audits twice a year to ensure transparency within the company,” he added.
Regarding expansion, Chickin is not being aggressive. The company began by concentrating in Central Java. After establishing its systems and operations, it plans to slowly expand to other regions.
