Culinary Startups are still Interesting for Investors during the Pandemic

The corona pandemic and a number of challenges in the culinary sector have not stopped investors from investing in Indonesian food and beverage startups. There are at least six startup companies in this field that have received a total funding of more than US$ 128 million or around IDR 1.8 trillion.

The six start-ups, namely Hangry with US$ 3 million, Kopi Kenangan US$ 109 million, YummyCorp US$ 12 million, Mangkokku and Haus! US$ 2 million each, and Greenly, whose value was not stated. The figure is up compared to last year, with a total of US$ 72.75 million or around IDR 1 trillion from the five agreements.

Investors continue to see culinary startups despite facing a number of challenges, one of which is related to intellectual property rights (IPR). Based on a survey by the Central Statistics Agency (BPS) in 2016, only 11.05% of the 8.2 million business actors in the creative economy sector (Ekraf) registered IPR.

In the culinary sub-sector, only 19.75% have registered IPR. In fact, “this is fundamental. Ekraf’s main asset is intellectual property. This is actually a potential monetization and consideration for investors in investing,” said Deputy of Industry and Investment at the Ministry of Tourism and Creative Economy Fadjar Hutomo, Friday (11/12).

IPR protects the product from being copied. In addition, it can be used as a means of production and advertising, as well as building a reputation.

Management of the Company Becomes very Important when the Business Scale Increases

However, Fadjar considers that the main challenges for culinary sector players are human resources (HR) and the ability to manage a business. “In fact, this is a continuous and dynamic process,” he said.

The same thing was conveyed by the VP of Investment & Business Development BRI Ventures, Markus Liman Rahardja. Primarily, Markus focuses on managing the company when the business scale increases.

“Industry is all about taste. So, how to maintain consistency as the scale of the business goes up. Managing five shops with 20 is different. Likewise with 300 outlets. This requires capability and uniqueness,” said Markus during a virtual press conference regarding the announcement of BRI Ventures funding for Haus! on Friday (11/12).

BRI Ventures through the Sembrani Nusantara Venture Fund did invest US$ 2 million or around IDR 30 billion in Haus! last week (2/12). Haus has even become the first startup to be injected with capital by the fundraising company.

Markus assessed that investors are interested in food and beverage startups that provide products that are liked by the public. “We start (identification) from here,” he said.

“We see the uniqueness of the product and quality. Is this needed by consumers?” To find out about this, BRI Ventures uses the mystery shopping method. Companies send employees to measure the quality of services and products.

There are 3 Indicators that are Examined by Investors

Apart from that, three other indicators were studied. First, the capacity of the founders (founders) and how to manage finances. Second, the targeted market. Finally, the prospect of increasing the business scale.

The review is needed to measure the resilience and sustainable growth prospects of startups. Moreover, culinary is one of the sectors affected by Covid-19 pandemic. From the business side, CEO Haus! Indonesia Gufron Syarif said that HR is the main challenge.

Therefore, “we developed a system, standard operating procedures (SOP), and supervision. We haven’t even focused on expanding to other areas because we want to fix this, by looking for professional talents,” he said.

Meanwhile, from the marketing side, Haus! focuses on product innovation and targets the fashion community to music. In this way, sales can reach IDR 5 million to IDR 7 million per kiosk.

“The capital expenditure or capex of IDR 420 million to build one outlet can be closed within a year. So, it’s fast enough to break even or break-even point (BEP),” said Gufron. The amount of the capex includes renovation needs, kitchen utensils, and furniture. Costs other than renting a place can reach IDR 100 million.