BukuWarung raises funds from angels, graduates from Y-Combinator
By Digital News Asia October 1, 2020
- Launches digital payments, seeing several millions USD in annualised TPV,
- Hires leadership team with experience from PayTM, Ovo, Grab, Gojek, Oy, Sampoerna
Indonesian fintech company, BukuWarung, which helps Indonesian micro-businesses manage their cash and credit transactions, announced on Monday that it has raised funds from leading investors after graduating from Y-Combinator.
Investors in this round include partners of DST Global, GMO Venture Partners, Soma Capital, HOF Capital, VentureSouq and a clutch of angels including William Hockey (Plaid), Justin Mateen (Tinder), Rahul Vohra (Superhuman), Scott Belsky (CPO Adobe), Josh Buckley, Manik Gupta (ex-CPO Uber), Sriram Krishnan (Spotify), Harry Stebbings (20VC), Nancy Xiao (Bond Capital), Alison Barr Allen (Fast), along with angels from WhatsApp, Square and Airbnb
BukuWarung has successfully raised double digits millions in US dollar funding, spread over three rounds in 2020. Current investors in the company include Quona Capital, East Ventures, AC Ventures, Golden Gate Ventures, Tanglin Venture Partners, Michael Sampoerna. The company is also backed by angel investors from companies such as Grab, Gojek, Flipkart, PayPal, Xendit and Mastercard. Having just launched digital payments in August, BukuWarung aims to significantly grow its user-base across Indonesia and to expand beyond its core bookkeeping features to products such as credit, savings, and insurance.
Founded in 2019, BukuWarung is addressing the financial services gap plaguing Indonesia’s 60 million micro-, small-, and medium-sized enterprises (MSMEs). Despite contributing around 60 percent towards Indonesia’s US$1 trillion GDP – these enterprises have been left behind in the digital transformation of the nation’s business ecosystem. A key operational challenge is their reliance on manual processes to do their accounting and repayments with customers, as BukuWarung estimates that less than 10% of the micro-businesses use any kind of digital tools to manage their business.
The company’s technology helps to accelerate and improve the bookkeeping process by tracking all transactions including credit, expense, and sales, and helps merchants with cash flow visibility through business reports. Through BukuWarung, merchants receive 3x faster repayments and see increased cash flow due to the automatic payment reminders sent by the app. This automatic payment feature, a “soft reminder” helps address a trait of the micro business market where merchants are reluctant to remind customers on credit, for payment.
In an early July interview with TechCrunch, BukuWarung founders say they have signed up 600,000 merchants across 750 locations in Indonesia. Via its app, the company claims to have recorded several billion US dollars in gross transactional value, which it claims has grown 100x in 2020 so far. This makes it Indonesia’s largest and fastest-growing accounting platform, it says. As of early July it claimed 200,000 monthly average users.
“Our hypergrowth has been driven by a product-led and capital-efficient strategy. We’ve kept our product as simple, fast and native as WhatsApp, which is used by almost all MSMEs in Indonesia. This focus has resulted in great retention and engagement among underserved merchants who’re coming online as a business for the first time. We enhanced our bookkeeping feature to go beyond credit management; we added more granularity by introducing expense, sales, profit tracking, bluetooth printing, inventory management, business cards, and other features to help MSMEs understand and operate their business better,” said Chinmay Chauhan, cofounder of BukuWarung.
BukuWarung seeks to expand its technology team and build a range of financial services. As part of this strategy, BukuWarung launched a digital payment feature, in partnership with major Indonesian banks and e-wallet services such as OVO and DANA. It is the first company of its kind in Indonesia to provide this feature.
Within a month of launching digital payments, BukuWarung is already seeing several million US$ of TPV (total payment volume) on an annualised basis and growth of 50x. Digital payments was introduced in response to evolving demands from its merchants for a safer and more efficient way to send and receive money, especially due to the ongoing Covid-19 pandemic.
“We launched successful pilots for savings and working capital loans for our merchants and the early results are very promising in our path to monetisation. Launching digital payments is a crucial first step to realizing our mission to build the digital infrastructure for micro-businesses in Indonesia, especially since most of the transaction that flows through the ecosystem is still in cash. We are also going deeper in the payment solutions that we offer by providing our merchants with a more holistic solution for their cash and credit management needs across the value chain,” said Abhinay Peddisetty, cofounder of BukuWarung.
Steered by a team of fintech and merchant network veterans
BukuWarung was founded by Chinmay and Abhinay, who previously led Product and Revenue at Carousell and were Product Leaders at Grab and Kudo. While the idea behind BukuWarung came from experiencing the unmet financial needs of micro-businesses first hand, the founders were also inspired by their personal journeys, with both coming from families who ran small neighborhood stores and being fully aware of the operational challenges small businesses face.
The founders have also assembled a strong leadership team that includes talent with robust and extensive experiences in the fintech and merchant ecosystems:
- Mario Nicolas, Head of Growth. Mario possesses over a decade’s experience in product-driven growth, fintech and localisation for tech companies such as Oy!, Grab and Kakao.
- Abhay Jindal, Head of Engineering. Abhay possesses strong backend platform experience in technology firms from his time at e-commerce payment provider PayTM. Before that, he worked at logistics technology firm Rivigo and Amazon.
- Alka Gupta, Head of Analytics. Aika has a strong background in Indonesia’s fintech ecosystem, having worked in strategy roles for companies such as regional super-app Grab & Indonesia’s major wallet Ovo. In her new role, she will help BukuWarung collect data on merchants, as well as building insights to improve and build new products
- Adi Harlim, Head of Partnerships. Before joining BukuWarung, Adi worked with the Sampoerna Group, where he primarily focused on the company's retail operations like SRC. From his experience, Adi has built a large merchant network which helped him be attuned to the evolving needs of Indonesia’s grassroots businesses.