💡 GOOD (but not so good) Story

🇮🇩 TaniHub: From farm-to-table to farm-to-failure, a $82.5M mistake to learn from for startup founders! 🌾

💛 Today’s story is co-curated with Admond - founder of The Runway Ventures, a weekly newsletter to help people learn from startup failures to become top 1% founders.

📈 The Rise of TaniHub

TaniHub is a B2B platform that connects Indonesian farmers with businesses that use or sell their products. It was founded by 3 founders in 2015, including Miftahul Choiri, Michael J. Sugianto (fresh data graduate), and William Setiawan (web/product designer).

The Problem — Indonesian farmers face significant challenges, including uncertain harvests, fluctuating prices, and inadequate storage facilities.

The Solution — TaniHub connects farmers directly to customers without the need for middlemen. They helped farmers earn more for their crops by streamlining distribution channels.

TaniHub grew rapidly, and by 2020, they had secured $65.5 million in Series B funding in May 2021. They supported over 110,000 farmers, 1,339 SMEs, and 350,000 retail customers.

📉 The Fall of TaniHub

Well… The agri-party didn’t last long. Despite their initial success, things started to go downhill quickly.

• Mar 2022 — TaniHub closed all B2C services to focus on B2B due to high operation costs in B2C and the surge in B2B after the COVID-19.

• Jul 2022 — Johnny Widodo, former CEO of OLX Indonesia, was appointed as the new CEO.

• Dec 2022 — The company was sued for loan defaults through TaniFund, with only 36% of their 90-day loans being repaid.

• May 2024 — TaniFund's license was officially revoked by the OJK.

❌ 2 Mistakes

Mistake 1 - Too ambitious
TaniHub started with a noble mission of connecting farmers to businesses, but they quickly expanded into logistics (TaniSupply) and financing (TaniFund).

Mistake 2 - Mismanagement of risk in lending
With only 36% of 90-day loans being repaid, TaniFund's loan default rates were so high that they were basically throwing money into infertile soil.

💡 3 Lessons Learnt

Lesson 1: Focus on what you’re good at
TaniHub's initial success came from connecting farmers to businesses. They should have perfected this before branching out to TaniSupply and TaniFund.

Lesson 2: Understand your market deeply
TaniHub underestimated the complexities of agricultural financing, leading to unsustainable default rates in their lending arm (TaniFund).

Lesson 3: Ensure leadership stability
When co-founders and top management started quitting, it was a flashing neon sign that something was not right. And when leadership keeps changing, it’ll affect employees’ morale and cause disruptions in the company.

P.S. Do you enjoy this long form type of stories? Love to hear your feedback, feel free to reply to this email, thank you!

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💁‍♀️💁‍♂️ GOOD People

🙋‍♀️ Joelle Pang | SEA Expansion Lead, Acumen

🙋‍♂️ Fadli Moja Amin | Head of Sustainability, Malaysia Digital Economy Corporation (MDEC)

🙋‍♀️ Sheryl Fofaria | Head of Social Impact & Philanthropy for SEA, UBS