BukuWarung, a startup digitizing Indonesia’s SMEs, raises new funding from Rocketship.vc

BukuWarung, an Indonesian startup focused on digitizing the country’s 60 million small businesses, announced today it has raised new funding from Rocketship.vc and an Indonesian retail conglomerate.

The amount was undisclosed, but sources say it brings BukuWarung’s total funding so far to $20 million. The company’s last round, announced in September 2020, was between $10 million to $15 million. Launched in 2019, BukuWarung was founded by Chinmay Chauhan and Abhinay Peddisetty and took part in Y Combinator last year.

Rocketship.vc is also an investor in Indian startup Khatabook, which reached a valuation between $275 million to $300 million in its last funding round. Like Khatabook, BukuWarung helps small businesses, like neigborhood stores called warung, that previously relied on paper ledgers transition to digital bookkeeping and online payments. BukuWarung recently launched Tokoko, a Shopify-like tool that lets merchants create online stores through an app, and says Tokoko has been used by 500,000 merchants so far.

Chuahan, BukuWarung’s president, said it has started making revenue through its payments solution. In total, BukuWarung now claims more than 3.5 million registered merchants in 750 Indonesian towns and cities, and says it is recording over $15 billion worth of transactions across its platform and processing over $500 million in terms of volume.

SMEs contribute about 60% to Indonesia’s gross domestic product and employ 97% of its domestic workforce, but many have difficulty accessing financial services that can help them grow. By digitizing their financial records, companies like BukuWarung can make it easier for them to access lines of credit, working capital loans and other services. Other companies serving SMEs in Indonesia, Southeast Asia’s largest economy, include BukuKas and CrediBook.

BukuWarung will use its new funding to grow its tech and product teams in Indonesia, India and Singapore. It plans to launch more monetization products, including credit, and grow its payments solution this year.

#asia, #bukuwarung, #digital-bookkeeping, #fundings-exits, #indonesia, #smes, #southeast-asia, #startups, #tc

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Indonesian fintech startup BukuWarung gets new funding to add financial services for small merchants

A month after completing Y Combinator’s accelerator program, BukuWarung, an financial tech startup that serves small businesses in Indonesia, announced it has raised new funding from a roster of high-profile investors, including partners of DST Global, Soma Capital and 20VC.

The amount of the funding was undisclosed, but a source told TechCrunch that it was between $10 million to $15 million. The new capital will be used to hire for BukuWarung’s technology team. TechCrunch first profiled BukuWarung in July.

Angel investors in the round include several high-profile founders and executives: finance technology platform Plaid’s co-founder William Hockey; Tinder co-founder Justin Mateen; Superhuman founder Rahul Vohra; Adobe chief product officer Scott Belsky; Clearbit chairman and startup advisor Josh Buckley; former Uber chief product officer Manik Gupta; Spotify’s former head of new markets in Asia Sriram Krishnan; 20VC founder Harry Stebbings; Nancy Xiao, an investor with Bond Capital; and Fast co-founder Allison Barr Allen. Angel investors from WhatsApp, Square and Airbnb also participated.

Launched last year by co-founders Chinmay Chauhan and Abhinay Peddisetty, BukuWarung is targeted at the 60 million “micromerchants” in Indonesia, including neighborhood store (or warung) owners. The app was originally created as a replacement for pen and apper ledgers, but plans to introduce financial services including credit, savings and insurance. In August, the company integrated digital payments into its platform, enabling merchants to take customer payments from bank accounts and digital wallets like OVO and DANA. BukuWarung’s goal is to fill the same role for Indonesian merchants that KhataBook and OKCredit do in India.

 

One of the reasons BukuWarung launched digital payments was in response to customer demand for contactless transactions and instant payouts during the COVID-19 pandemic. Since introducing the feature, the company said it has already processed several million U.S. dollars in total payment volume (TPV) on an annualized basis. The company says it now serves about 1.2 million merchants across 750 locations in Indonesia, focusing on tier 2 and tier 3 cities.

Digital payments is also the first step into building out BukuWarung’s financial services, which will help differentiate it from other bookkeeping. The payments features is currently free and BukuWarung is experimenting with different monetization models, including making a small margin on fees.

“The reason why we launched payments is also very strategic, because there is a lot of pull in the market. We have already seen several millions annualized TPV in less than a month, because the payments we offer are cost-efficient as well and cheaper than to get from a bank,” Chauhan told TechCrunch.

“If you look at the Indian players, like Khatabook, they have also launched digital payments. The reason for that is because it’s a very essential step for building a business and monetization,” he added. “If you don’t have payments, you can’t do anything like that.”

Chauhan added that building a financial services platform is the difference between providing a utility app that replaces bookkeeping ledgers, and becoming an essential service for merchants that will eventually include lending for working capital, savings and insurance products. The bookkeeping features on BukuWarung will feed into the financial services aspect by providing data to score creditworthiness, and help small merchants, who often have difficulty securing working capital from traditional banks, get access to lines of credit.

#apps, #asia, #bookkeeping, #bukuwarung, #financial-services, #financial-tech, #fintech, #fundings-exits, #indonesia, #micro-merchants, #smes, #southeast-asia, #startups, #tc

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Meet BukuWarung, the bookkeeping app built for Indonesia’s 60 million “micro-merchants”

In Indonesia, there are about 60 million “micro-merchants,” typically small store owners who sell food and other staple items, and have close relationships with their customers. Many often extend informal lines of credit to shoppers, but much of their financial tracking is still done with pen and paper ledgers. Chinmay Chauhan and Abhinay Peddisetty, the co-founders of BukuWarung, want to digitize the process with a financial platform designed especially for small Indonesian businesses. Their goal is to start with bookkeeping tools, before expanding into services including access to working capital.

The startup is currently taking part in Y Combinator’s startup accelerator program. BukuWarung has also raised seed funding from East Ventures, AC Ventures, Golden Gate Ventures, Tanglin Ventures, Samporna, as well as strategic angel investors from Grab, Gojek, Flipkart, PayPal, Xendit, Rapyd, Alterra, ZEN Rooms and other companies.

Chauhan and Peddisetty met while working together at Singapore-based peer-to-peer marketplace Carousell, where they focused on developing monetization products for sellers. Chauhan also worked on products for merchants at Grab, the largest ride-sharing and on-demand delivery company in Southeast Asia. But the inspiration behind BukuWarung is also personal, because both Chauhan and Peddisetty’s families run small neighborhood stores.

“We can look at this more deeply given the experience we have monetizing merchants at Grab and Carousell,” Chauhan said. “We also know good potential exists in Indonesia, where we can help 60 million micro-merchants come online and digitize. From a macro-level, we felt this would be a huge opportunity, and there is also the personal element of being potentially being able to impact millions of merchants.”

Paper records not only make tracking finances a labor-intensive process, but also means it is harder for merchants to gain access to lines of credit. Chauhan and Peddisetty told TechCrunch that their goal is to expand the company to financial services as well, doing for Indonesian merchants what KhataBook and OKCredit have done in India. Since launching last year, BukuWarung has signed up 600,000 merchants across 750 cities and towns in Indonesia and currently has about 200,000 monthly average users. The founders say their goal is to reach all 60 million micro-, small- and medium-sized businesses in Indonesia. It has already made its first acquisition: Lunasbos, one of the first Indonesian credit tracking apps.

BukuWarung founders Chinmay Chauhan and Abhinay Peddisetty

While preparing to launch BukuWarung, the founders traveled through Indonesia, speaking to almost 400 merchants about their challenges with bookkeeping, credit tracing and accounting. Based on those conversations, the two decided to start by focusing on a bookkeeping app, which launched 10 months ago.

Despite a partial lockdown in Indonesia from April to June, BukuWarung continued to grow because most of its users sell daily necessities, like groceries. In smaller cities and villages, merchants often offer credit lines because their customers’ cash flow is very tight, and many do not have a regular monthly paycheck, Chauhan said. “Everyone is buying and selling on credit, that is something we validated in our research.”

Then there is the community aspect, where many merchants are close to their customers.

“This changes depending on the location of the business, but business owners have often known a lot of people in their neighborhoods for a long time, and when it comes to credit, they typically offer 500 Indonesian rupiah all the way up to about one million rupiah [about USD $70.56],” Chauhan said. But when it’s time to settle bills, which often means going to customers’ homes and asking for payment, many merchants feel hesitant, he added.

“They will never chase or call the person. The app we built sends automatic reminders to customers, and this ‘soft message’ really helps merchants not feel shy while at the same time professionally giving customer reminders.”

While talking to merchants, BukuWarung’s founders also realized that many were using pay-as-you-go data plans and lower-end smartphones. Therefore, their app needed to be as lightweight as possible, and work offline so users could access and update their records anytime. This focus on making their app take up as little data and space as possible differentiates them from other bookkeeping apps, the founders said, and helps them sign up and retain users in Indonesia.

Chauhan and Peddisetty said the company will partner with financial tech companies as it grows  to give users access to online payment systems, including digital wallets, and financing.

In a statement to TechCrunch, Y Combinator partner Gustaf Alströmer said, “Building digital infrastructure for emerging economies is a huge opportunity, especially in the post-COVID world. And we believe BukuWarung is a team that can take on this challenge. We have seen this journey before with Khatabook and OkCredit in India and see that BukuWarung is on a similar growth trajectory to empower micro-businesses in Indonesia.”

 

#apps, #asia, #bookkeeping, #bukuwarung, #financial-services, #fintech, #indonesia, #smes, #southeast-asia, #startups, #tc

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