BukuWarung, an Indonesian fintech startup that helps micro-SMEs (MSMEs) digitise their businesses, has raised $60 million in its Series A round, led by US-based VC firms Valar Ventures and Goodwater Capital, confirming an earlier story done by DealStreetAsia.
In April, we had reported about the development that marks Valar’s first funding in the archipelago. The VC fund backed by PayPal co-founder Peter Thiel earlier made headlines in March when it clocked its first investment in India, thereby backing the seed round of fintech startup Velocity.
Others who participated in BukuWarung’s oversubscribed round include its existing investors and notable angel investors such as former GoPay CEO Aldi Haryopratomo and Victor Jacobsson, founder of Europe’s most valuable startup Klarna, as well as partners from Japanese behemoth SoftBank, and Trihill Capital.
BukuWarung says the fresh capital, which brings its total funding to $80 million, will be used to ramp up its technology and product capabilities across its core accounting, digital payments, and commerce products.
Going forward, it plans to build a robust payments infrastructure to solve deeper use cases for Indonesian merchants, such as QR payments, and financial services, among others.
Founded in 2019, the Jakarta-based company entered the Indonesian market with a ledger app that helps merchants improve their bookkeeping process by tracking transactions including credit, expenses, sales, and cash flow visibility through business reports.
Its big mission, however, is to digitise Indonesia’s 60 million MSMEs which contribute over 60 per cent of the country’s GDP and employ 97 per cent of its workforce.
Since its inception, BukuWarung has added various features including inventory management, custom invoice creation, and bulk transaction features. This year, the company also launched Tokoko, a Shopify-like tool enabling merchants to create online stores and sell products through WhatsApp and other social media.
“This investment will further help us build an operating system for MSMEs, creating a positive socio-economic impact across Indonesia as the country emerges from the COVID-19 pandemic,” BukuWarung co-founder and CEO Abhinay Peddisetty said in a statement.
The company claims to have served 6.5 million merchants across its bookkeeping, payments, and e-commerce solutions. One of its main focuses now will be to enhance its online payments capabilities, which it launched last year.
BukuWarung claims it hold 90 per cent market share in the MSME online payment space and has reportedly processed around $1.4 billion annualised payments, which it expects to grow to over $10 billion by 2022.
In the long term, BukuWarung says it looks to enhance its offerings with more MSME-focused financial services such as lending, savings, and insurance.
In its efforts to provide a comprehensive fintech offering for the country’s MSMEs, BukuWarung sees stiff competition from rival bookkeeping app BukuKas, which recently announced its Series B funding round of $50 million. Interestingly, BukuKas has also rolled out a payment feature and social commerce tool, while also eyeing savings and lending capabilities for MSMEs.
Meanwhile, e-commerce unicorns Bukalapak and Tokopedia, too, are quietly foraying into the space having launched bookkeeping features in their online-to-offline (O2O) platforms for MSMEs while also offering various financial services on top of it.