BukuWarung Raises $60 Mn In Series A Round Led By Valar Ventures And Goodwater Capital
The fresh funds will be used to strengthen BukuWarung's payment solutions and build an operating system for MSMEs and also aims to double the team size to over 300 across Indonesia, Singapore, and India
Indonesia-based fintech company BukuWarung, helping micro-SMEs (MSMEs) digitize their business, announced on Thursday to have raised $60 million in Series A funding. The round was led by the US-based VC firm Valar Ventures, early investors in global fintech unicorns Wise and N26, and Goodwater Capital, which has invested in Coupang, Monzo, and Xendit. Other investors in the oversubscribed round include existing investors and notable angel investors such as former GoPay chief executive officer Aldi Haryopratomo and Victor Jacobsson, founder, Klarna as well as partners from SoftBank, Trihill Capital.
The funding marks the largest Series A round raised by an MSME player globally and brings BukuWarung’s total funding to date to approximately $80 million.
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.
“Small businesses are central to Indonesia's economy and culture, yet they are forced to use products which don't cater to their needs. The pandemic has made this more apparent than ever. The entire team at BukuWarung is dedicated to helping merchants adapt to an online world of commerce and have established themselves as the clear market leader through relentless execution. 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,” stated James Fitzgerald, founding partner, Valar Ventures.
Founded in 2019, BukuWarung’s mission is to digitize Indonesia’s 60 million MSMEs – a fulcrum of the nation’s economy as they contribute over 60 per cent of GDP and employ 97 per cent of the workforce.
“BukuWarung is already a market leader in MSME digital payments growing in a cost-effective and sustainable manner since its inception. 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. This vote of confidence shown by our investors will be instrumental in driving our mission to digitize MSMEs – especially during one of the most challenging global crises in recent history – across Indonesia and later, the region beyond,” said Abhinay Peddisetty, co-founder and chief executive officer, BukuWarung.
Over the last 6 months, BukuWarung has grown fivefold in team size to around 150 people and has attracted top talent (from global firms like Google, Amazon, Microsoft, etc) for several key leadership positions to enable BukuWarung for the next stage of growth. The company also has aggressive hiring plans; BukuWarung aims to double its team size to 300 and threefold its engineering and product teams across Indonesia, Singapore, and India, as well as remote teams in other locations.
“COVID-19 continues to expose the vulnerabilities of Indonesian MSMEs who remain a linchpin of the national economy. We have since seen the ecosystem rally – between stakeholders big and small – to accelerate the MSMEs’ digitization by improving their operational resilience and market reach. From my experience, BukuWarung is not only building on such efforts but also emerged as one of the key actors accelerating this much-needed transformation. The company’s drive to improve digital payments capabilities via an accessible platform will help to further close the digital divide for MSMEs,” remarked Aldi Haryopratomo, former chief executive officer, GoPay.
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-II and tier-III locales. The company's growth in users and payment volumes has been capital efficient with over 90 per cent of its funds raised still in the bank.
“BukuWarung has contributed tremendously to help digitize the Indonesian MSME ecosystem and emerge as the market leader in this space. It is no surprise that they have achieved outstanding growth in just under 18 months as we were always confident in their vision, capabilities and drive since day one. This makes us excited for what they have planned in their next phase as it scales its efforts and enhances its offerings to help more MSMEs digitize,” added Pandu Sjahrir, managing partner, AC Ventures.
BukuWarung is now focusing on enhancing the online payments capabilities of Indonesian MSMEs, given that merchants networked with the company are now selling their products and/or services online. Since the introduction of its digital payment features last year, BukuWarung has processed around $1.4 billion annualized payments and is the clear market leader in Indonesia’s MSME digital payments space with a 90 per cent market share versus its nearest competitor. It is on track to process over $10 billion in annualized payments by 2022.
The company will also strengthen the digital payment infrastructure for MSMEs by offering a wide range of payment solutions that solve the needs of merchants as they go digital.