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🐓 The chicken startup that couldn't fly
How Pitik went from poultry powerhouse to $59M failure
Admond Lee
October 20, 2024
Hey Founders,
Welcome to The Runway Ventures — a weekly newsletter where I deep dive into failed startup stories to help you become the top 1% founder by learning from their mistakes with actionable insights.
💛 Today’s issue is co-created with Nelson who is the founder of Good Karma Club — a weekly newsletter that shares startup insights and resources with impact founders in Southeast Asia.
Fun Fact: When I was building my first startup, I had zero connections. Attending the Tech in Asia Conference was probably the best decision I ever made. Because of that, I connected with many amazing founders, pitched to investors, learned what worked and what didn’t work, and even got early users for our product — all within 2 days.
Crazy. It was a huge leverage of my time.
🇮🇩 This year, the Tech in Asia Conference will be held in Jakarta in Indonesia on 23-24 October. If you’re a founder or investor, I highly recommend attending the event — you won’t regret it (seriously).
Just use this promo code (TRV20OFF) for 20% off for all ticket types (General Pass, Pro Pass, Investor Pass) and join us here (some ticket options already sold out).
P.S. This promo code is exclusive to only subscribers of The Runway Ventures
Let’s get to it! 🚀
Today at a Glance:
☠️ 1 Failed Startup → Pitik
⚠️ 2 Mistakes → Over-reliance on investor funding with aggressive expansion
🧠 3 Lessons Learned → Be optimistic long term, and pessimistic short term
🔗 The Runway Insights → How to regain control of a meeting
💰 Southeast Asia Funding Radar → GlobalTix, a SG-based ticketing company, secures $4.9M in Series B funding led by Tin Men Capital
☠️ 1 Failed Startup: Pitik
🚀 The Rise of Pitik
🇮🇩 Pitik was founded in 2021 by Arief Witjaksono and Rymax Joehana. Arief, with a background in poultry farming (former COO at a traditional poultry farm), and Rymax, with extensive experience in finance (consulting and M&A), aimed to revolutionise Indonesia’s poultry farming industry.
The Problem — 🐥 Chicken farmers struggle with inefficiencies in farm management, high costs, and volatile demand.
The poultry industry in Indonesia was ripe for disruption with chicken consumption projected to grow by 13.5% to reach 9.3 kilograms per capita by 2029.
However, Indonesia’s poultry production lagged behind global standards by 20-30%.
This means the demand is massive, and there’s an urgent need for improvement.
The Solution — 🐓 Pitik is an agritech startup that empowers Indonesian chicken farmers through technology to produce chickens more efficiently.
It provides farmers with smart farming applications, farm inputs, and financing solutions to enhance productivity and efficiency.
With its farm management system equipped with IoT devices and a smart farming app, it gives farmers real-time insights into their operations, helping them optimise chicken production.
Pitik also offers financing to farmers who need capital to expand their operations.
🐓 In short, Pitik helps chicken farmers grow their livestock more efficiently using technology.
 🐣 → 🐥 → 🐓 → 🍗 | 🐥 And guess what? It works. Chicken farmers love Pitik. By October 2022, Pitik had achieved incredible traction:
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Not just that, Pitik’s transparent payment processes differentiate them from competitors as payments are processed within 7 working days, unlike other distributors who delay payments for months.
💰 In May 2022, Pitik raised $14 million in Series A funding including investors like Alpha JWC Ventures and Wavemaker Partners. The game plan? Expand across Indonesia.
🐓🐓🐓 At this point, Pitik was seen as a rising star in Indonesia’s agritech scene. It was probably Indonesia’s largest poultry tech company. It was flying high…
📉 The Fall of Pitik
🍗 Well… Pitik actually started sinking 1 year after raising fund.
The downfall of Pitik began to unravel as quickly as it rose to fame due to a tangled mess of aggressive expansion, over-reliance on investor funding, and failure to adapt to the challenges of Indonesia’s volatile poultry market.
It’s said that one of the co-founders was on holiday in Australia during massive layoffs
📌 Here’s what happened to Pitik:
🐥 Happy days for chickens
2021 — Pitik was founded by Arief Witjaksono and Rymax Joehana.
Oct 2022 — Achieved $12.2M in revenue with 500 IoT systems installed across Java island.
May 2022 — 💰 Raised $14M in Series A funding from Alpha JWC Ventures and Wavemaker Partners.
According to DealStreetAsia, Pitik has so far raised $15.76M at an estimated valuation of $59.5M.
Feb 2023 — Held back its expansion plans due to economic conditions.
Pitik’s plans to expand to Sumatra were put on hold.
⛈️ This was the beginning of the storm…
🐔 Sad days for chickens
Dec 2023 — 💸 Situation became worse. Pitik reported $0 revenue and $6.52M net loss.
Failed to raise an additional $10M in convertible notes.
Tried to seek funding from existing investors like Alpha JWC Ventures and MDI Ventures — but failed.
Feb 2024 — 🪓 1st layoff → Laid off more than half of its employees (employed around 250 staff members back then) to stay afloat.
2nd layoff → The entire tech department was dismissed on 1st April 2024.
🤯 Management reportedly decided to revert to traditional methods without tech support (agritech → agri ??)
Amidst these layoffs, employees reported that severance pay was delayed, and one of the co-founders was allegedly vacationing in Australia, fuelling concerns about management’s commitment to the company.
Apr 2024 — ⚠️ Operations ceased and the company’s website became inaccessible.
Social media accounts went silent after March 2024.
Their last Instagram post on 31 March 2024 featured 2 distressed comments from former employees seeking clarity on severance pay (no reply from Pitik yet).
Jul 2024 — ⚰️ Pitik officially died after the confirmation from DealStreetAsia.
🐓 Pitik’s downfall is a classic case of over-expansion and over-reliance on external funding. Their aggressive hiring and expansion, fuelled by investor money, left them vulnerable when the market conditions shifted.
🍗 In the end, they could not adapt quickly enough, leading to layoffs, lost investor confidence, and the eventual shutdown of operations.
Want to learn more about Pitik’s downfall?
⚠️ 2 Mistakes
Mistake 1: Over-reliance on investor funding with aggressive expansion
Pitik raised a whopping $14 million in Series A funding in May 2022, which fuelled their aggressive expansion plans across Indonesia. However, they became overly dependent on this influx of cash without establishing a sustainable revenue model.
When market conditions shifted, they found themselves unable to adapt. By 2023, when they attempted to expand to Sumatra, they faced economic challenges that forced them to hit the brakes. Besides, words on the street said Pitik was overhiring. They hired too many people with high salaries beyond the normal market rate.
📈📉 In short, Pitik grew rapidly after the pandemic and raised tons of cash when the interest rate was low (easy money). As they expected to grow even more quickly, they hired more people to scale faster. And when shit happened, they were burning cash and bloated with headcount that ultimately led to massive layoffs.
Mistake 2: Failed to adapt to market shifts
In an interview with Tech in Asia, Rymax said that one of the biggest challenges in Indonesia’s poultry industry is demand volatility.
There are months that our numbers are positive, but at some point, there is a possibility for it to become negative.
Typically, demand volatility is due to:
🧑🏻🌾 Internal Factors:
The demand fluctuates as many Indonesians still consider chicken a luxury food.
When harvest time comes, prices fall far below contract prices agreed between most startups and their farmers.
🔥 External Factors
Price hikes in chicken feed due to the ongoing Ukraine crisis have pressured margins in this industry, as any rise in chicken meat prices hurts demand.
Besides, Arief said that the poultry industry in Indonesia was hit by the fuel price hike in October 2022, causing the demand to be lower at that time.
Yet Pitik was unprepared for the economic downturn that hit in early 2023. Their business model relied heavily on predictable growth, but when market conditions shifted, they couldn't pivot quickly enough to stay afloat.
By the time they realised that, it was too late.
🧠 3 Lessons Learned
Lesson 1: Be optimistic long term, and pessimistic short term
Being optimistic about the future is important to maintain a long-term vision, but it’s also important to be aware of the short-term realities that could derail your plans. Always think a few steps ahead and foresee potential disasters in the future.
In the context of Pitik, the founders raised significant funds and expanded aggressively without fully preparing for potential market fluctuations or operational hurdles. Expansion looked good for the short term, but bad for the long term when shit happened.
🌟 Key Takeaways:
☔️ Have a short-term financial buffer
Always maintain at least 6-12 months of operating expenses in reserve, even during high-growth phases.
This gives you breathing room if market conditions change or if funding dries up.
✍🏻 Conduct scenario planning
Regularly conduct “what-if” scenarios where you assess what could go wrong over the next 6 months — whether it’s losing a key client, a dip in market demand, or rising costs.
Use these scenarios to adjust short-term operations and strategies.
📈 Incremental and sustainable growth
Instead of scaling rapidly across multiple regions or markets, grow incrementally.
Focus on making your core market or product offering bulletproof before venturing into new territories.
Lesson 2: Build a self-sustaining business (not just a fundraising machine)
While investor capital can accelerate growth, relying too heavily on external funding is risky. Pitik’s aggressive expansion, hiring spree, and reliance on investor money left them in a vulnerable position when they couldn’t secure more funding.
🌟 Key Takeaways:
🤑 Focus on profitability
Prioritise a path to profitability early, even if it means slower growth.
Instead of using investor capital as a crutch, use it to supplement and amplify revenue generated by the business.
🔥 Control burn rate
Closely monitor and control your burn rate, especially during periods of high growth.
Make sure your company can survive lean times when additional funding may not be available.
💵 Measure unit economics
Track key metrics like customer acquisition cost (CAC) and lifetime value (LTV) to ensure that you’re making money on each sale and that your business model scales efficiently.
The industry standard is that your LTV should be at least 3 times your CAC – otherwise, you're probably spending too much to get customers.
Here are the steps to calculate unit economics for your business.
Lesson 3: Adapt quickly to market shifts
Pitik’s failure to adapt to Indonesia’s volatile poultry market was a major cause of its downfall. This shows the importance of being nimble and proactive when market conditions shift.
If you move slowly you’ll die. It’s brutal, but that’s the reality.
🌟 Key Takeaways:
⚡️ Be agile and responsive
In industries with fluctuating demand or external pressures, you need to anticipate and prepare for downturns.
Have contingency plans in place, such as cost-cutting measures or alternative revenue streams, to ensure survival when the market changes.
👀 Monitor market trends closely
Regularly analyse market trends and customer behaviour.
This helps you identify early warning signs of potential issues, enabling you to act quickly.
In my opinion, the best way to “monitor” market trends is to keep talking with your customers to know their problems better than they do, understand their behaviours, and identify potential gaps that you can solve.
🔗 The Runway Insights
💰 Southeast Asia Funding Radar
GlobalTix, a SG-based ticketing company, secures $4.9M in Series B funding led by Tin Men Capital (Link)
OneLot raises $4M pre-seed to help used car dealers access loan easily (Link)
Zuora to be acquired by Silver Lake and GIC for $1.7B (Link)
OneCFO bags $500K to automate financial management for Philippine SMEs (Link)
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That’s all for today
Thanks for reading. I hope you enjoyed today's issue. More than that, I hope you’ve learned some actionable tips to build and grow your business.
You can always write to me by simply replying to this newsletter and we can chat.
See you again next week.
- Admond
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