Indonesia’s BukuWarung raises US$60mil in Series A funding
By Digital News Asia June 11, 2021
- Funding led by US-based VC firms Valar Ventures and Goodwater Capital
- Funds to be used to enhance tech, product capabilities, robust payments infrastructure
INDONESIAN fintech BukuWarung announced that it has raised US$60 million in Series A funding. The round was led by US-based VC firms Valar Ventures and Goodwater Capital, with other investors in the oversubscribed round including existing investors Aldi Haryopratomo, Victor Jacobsson and partners from SoftBank and Trihill Capital.
In a statement, BukuWarung said this brings its total funding to date to approximately US$80 million, a figure the company claimed is the largest Series A round raised by an micro small and medium enterprise (SME) player globally.
The funds will be used to enhance its technology and product capabilities across its core accounting, digital payments and commerce products, including building a robust payments infrastructure to solve deeper use cases for Indonesian merchants, such as QR payments, financial services, and more, it said.
Founded in 2019, BukuWarung's agoal is to digitise Indonesia’s 60 million micro SMEs. It initially offered accessible accounting soltuons to merchants nationwide, but have since expanded its scope of products to enable digital payments and help merchants make the offline-to-online switch to sell their products.
Micro SMEs in Indonesia are notably the fulcrum of the nation’s economy, contributing over 60% to the GDP and employing 97% of the workforce, BukuWarung said.
“The entire team at BukuWarung are dedicated to helping merchants adapt to an online world of commerce and have established themselves as the clear market leader through relentless execution,” said James Fitzgerald, founding partner of Valar Ventures.
“They close the digital gap for millions of merchants across Indonesia, and lead the charge towards a digital infrastructure that is more comprehensive and accessible than anything seen in the market.
“BukuWarung is a compelling opportunity and we are proud to call them our first investment into Indonesia.”
Over the last 6 months, BukuWarung has grown five times in size to approximately 150 people. The company claimed to have attracted top talent from global firms such as Google Inc, Amazon Inc and Microsoft Corp for several key leadership positions to enable BukuWarung to attain the next stage of growth.
The startup aims to double its team size to 300, including growing its engineering and product teams across Indonesia, Singapore and India by three times. Plans are afoot to ramp up remote teams in other locations too.
“BukuWarung is already a market leader in micro SME digital payments [arena], growing in a cost-effective and sustainable manner since its inception,” said Abhinay Peddisetty, co-founder and CEO of BukuWarung.
“This investment will further help us build an operating system for micro SMEs, creating a positive socio-economic impact across Indonesia as the country emerges from the COVID-19 pandemic.
“This vote of confidence shown by our investors will be instrumental in driving our mission to digitise mciro SMEs – especially during one of the most challenging global crises in recent history – across Indonesia and later, the region beyond.”
To date, BukuWarung has over 6.5 million registered merchants on the platform across 750 Indonesian cities and towns, with most operating in the country’s Tier 2 and 3 locales, the company said.
BukuWarung is now focusing on enhancing the online payments capabilities of Indonesian micro SMEs, it said.
Since the introduction of its digital payment features last year, BukuWarung has processed around US$1.4 billion annualised payments, making it the market leader in Indonesia’s MSME digital payments space with a 90% market share versus its nearest competitor, the company claimed.
It is on track to process over US$10 billion in annualised payments by 2022, it added.
In the long term, BukuWarung said it will enhance its offerings with more micro SME-focused financial services such as lending, savings and insurance.
It will also continue to build and update its operating system and enhancing the company’s platform with better workflow for payments and building deeper accounting use cases for its merchants.
Presently, BukuWarung has tools such as inventory management, custom invoice creation, bulk transaction features integrated into the operating system. The company plans to introduce more as a robust suite of features across upstream and downstream use cases for MSMEs, it said.
This includes Tokoko, the company’s Shopify-like tool enabling merchants, especially those in remote areas, to create online stores and sell products through WhatsApp and other social media.
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