5-month young Indon startup Ula raises US$10.5mil in seed funding
By Digital News Asia June 12, 2020
- Funding led by Sequoia India and Lightspeed India with angel investors
- Startup geared to modernise distribution & credit in Indonesia’s traditional retail
A five month young Jakarta-headquartered startup with its founders having experience at Lazada, Flipkart, P&G Indonesia and Amazon announced on Wed, 10th June that it had raised a US$10.5 million (RM44.8 million) seed round.
Ula, which describes itself as a multi-category wholesale e-commerce marketplace “that combines the technology, tools and skills of modern retail with the lean cost structure of traditional micro-retail,” sees Sequoia India and Lightspeed India leading the round, with participation from SMDV, Quona Capital, Saison Capital and Alter Global.
Also participating are several angel investors, which include Patrick Walujo of Northstar, Willy Arifin of Koinworks and Rohan Monga, who was COO at Gojek.
The Ula platform is designed specifically for an emerging economy like Indonesia, which traditional retail contributes to nearly 80% of the retail market, and employing millions of Indonesians. Typically, these small retailers are not only cost efficient, but also have personalised insights into customer behaviour.
However, poor sourcing and inadequate and sub-optimal working capital prevents these shop owners from taking advantage of market opportunity.
“A typical store has an 8-10% cost advantage over modern retailers given that they are usually tax exempt, employ their own family and operate out of their homes. Yet they aren’t competitive for lack of access to best sourcing and limited and expensive working capital”, says Ula cofounder Derry Sakti.
“For example, a grocery store might need to source inventory from up to 50 different sources (wholesalers / distributors) every week and sometimes order in bulk to get better rates, even when they don’t need such large quantities.”
This is where Ula comes in. It also uses data science to give working capital credit to retailers, which allows them flexibility in payment for goods.
“70-80% of the retailers in emerging markets like Indonesia are plagued by inefficiencies in supply chain, inventory and working capital management. With more and more Indonesian SMEs becoming open to adopting technology, platforms like Ula are an easy, affordable and scalable solution to help these retailers streamline their businesses,” says Sequoia Capital (India) Singapore managing director Abheek Anand.
“Ula has a highly experienced team bringing together the right mix of experience in local and global e-commerce, retail and fintech markets and we are excited to be early partners in this journey.”
The startup states that its current focus is on daily needs consumer goods (such as FMCG and staples), which is particularly crucial during the Covid-19 pandemic where traditional supply of essentials may be impaired.
Without being specific, Ula claims that the business has grown 10x since launch with customers returning to buy up to 2-3 times of their original volumes. It is currently in private beta and predominantly servicing East Java. Over the next year it plans to expand across the Java island and expand across categories such as apparel and electronics.
“For us, the true measure of Ula’s success will be in how much we can improve our customers' lives and businesses. Our collective vision is to revolutionize SMB trade using technology, helping increase their efficiency and providing them with tools to conduct their business seamlessly and more profitably” says Ula cofounder Riky Tenggara, formerly part of the early team at Lazada.
Ula’s other co-founders are Nipun Mehra, who had stints at Amazon, Flipkart and was part of the leadership team at the Indian payments firm Pine Labs; and Alan Wong, who worked at Amazon.
Ula already has teams in India and Singapore. It is currently looking to hire across roles of category management, analytics, credit, and city leaders in Indonesia as well as tech teams across Indonesia, Singapore and India.