Investors Back Global Online Market-place for Ethical, Green Farmers
KUALA LUMPUR (Thomson Reuters Foundation) - A former investment banker has raised more than $10 million to expand a startup that helps developing-nation farmers who are using green and ethical methods to earn more by linking them directly with food buyers around the world.
After a decade investing in commodity markets at Deutsche Bank and Korea Investment Corporation, Hoshik Shin set up online marketplace Tridge in 2015 to build a network of sustainable producers and link them to buyers at home and abroad.
Food sold on Tridge includes peppermint leaves from Egypt, peanuts farmed in Nigeria and mangoes grown in India and Thailand.
"At the moment, suppliers in emerging countries are so restricted to just meeting local buyers," said the South Korean entrepreneur, whose venture secured $10.5 million this month from investors to bolster the business.
"Through our platform, they can meet foreign buyers more easily ... prices will improve and that gives bigger benefits to both farmers and their employees," the 42-year-old told the Thomson Reuters Foundation.
Tridge users include the world's largest retailer Walmart Inc and French supermarket chain Carrefour, said Shin.
Globally, consumers and retailers are demanding more information about the goods they source, buy and eat, to make sure their production and transportation does not damage the environment, or use illegal and unethical business practices.
In response, manufacturers of household brands, restaurants and other businesses are seeking to attract more customers by offering products guaranteed free of deforestation or slave labour, for example.
Earlier this year, conservation group WWF launched a website that harnesses blockchain technology allowing users to scan a QR code on a product or menu revealing its full history and supply chain.
Seoul-based Tridge makes use of artificial intelligence, data and algorithms, and has about 80 employees in 40 countries verifying that suppliers are trustworthy and ethical.
Food sellers on the platform, who are based in about 150 countries, can cut out middlemen and traders along the supply chain, who often take a cut and push up prices.
"The buyers get cheaper sourcing, and the supplier can get a better selling price," said Shin.
Once linked, producers and their customers - which include large and small retailers, importers, manufacturers and caterers - can conduct business away from the website, with suppliers paying Tridge for the connection.
The online platform, whose main rival is China's Alibaba Group, has more than 1,000 food products, 60,000 suppliers and 40,000 buyers.
Last year, purchase requests totalled about $2 billion, Shin said, with a target of $10 billion for 2020.
"We figured that food and agriculture is the most fragmented industry," he said, noting the system can match sellers to buyers' specifications "within one second".
David Dawe, a senior economist at the U.N. Food and Agriculture Organization in Bangkok, said ethical and sustainable food supply chains often incur extra costs, making it hard for them to be competitive.
"Use of new digital technologies can counteract those additional costs, helping such businesses to survive and grow their market share," he added.