How "BukuKas" raised $10 million
The backbone of Indonesia’s economy is small to medium-sized businesses, which account for 60% of its gross domestic product. Many still believe manual bookkeeping, but the impact of COVID-19 has driven small businesses to digitize more of their operations. BukuKas, one among several startups helping SMEs go browsing, announced today it's raised a $10 million Series A led by Sequoia Capital India.
BukuKas launched in December 2019 as a digital bookkeeping app, but is growing its range of services with the goal of making an “end-to-end software stack” for little businesses. Eventually, it wants to launch an SME-focused digital bank.
The funding, which brings BukuKas’ total raised thus far to $22 million, included participation from returning investors Saison Capital, January Capital, Founderbank Capital, Cambium Grove, Endeavor Catalyst and Amrish Rau.
As of November 2020, BukuKas had a registered user base of three .5 million small merchants and retailers, and had crossed 1.8 million monthly active users. During that month, the platform also recorded $17.4 billion worth of transactions on an annualized basis, a figure like quite 1.5% of Indonesia’s $1.04 trillion GDP.
BukuKas was founded by chief military officer Krishnan Menon and chief operating officer Lorenzo Peracchione, who met eight years ago while performing at Lazada Indonesia.
Menon’s previous startup was Fabelio, an Indonesian online home furnishings store. Every two months, he would visit small cities in Indonesia, like Jepara and Cirebon, to source furniture.
“One of the items that stood out was how different the Jakarta bubble is from the remainder of Indonesia, all the way from the penetration of software to financial services,” he told TechCrunch. While lecture merchants and suppliers, Menon realized that “no one is building products with them as the center of the universe,” despite the very fact that there are 56 million small businesses.
Peracchione said he and Menon had been brainstorming startup ideas for a short time . “When he told me about the thought of solving income visibility to SMEs, it immediately struck me,” Peracchione said. “My dad wont to be a SME owner himself and through my childhood I experienced firsthand the struggles and ups and downs connected to running business.”
The two decided to start out with digital bookkeeping after chatting with 1,052 merchants, because helping them keep track of their business performance would generate data that might successively enable access to more financial services.
“Our vision expanded into providing an end-to-end software stack to digitize SMEs and help them across a good range of activities as a prequel to putting together an SME-focused digital bank down the road ,” Menon said.
In addition to digital ledger features, BukuKas also sends payment reminders to buyers through WhatsApp and automatically generates invoices, includes a listing management module and analyzes expenses to assist businesses understand what's impacting their profit. the corporate plans to feature digital payments this month. During the remainder of 2021, it'll also introduce more features to assist businesses sell online, including tools for online store fronts, a promotions engine and social sharing.
“With COVID-19, SMEs are rushing to urge digitization, but they lack the proper mobile-first tools to sell online, also managing their business,” said Menon.
The app focuses on smaller Indonesian cities and towns, since about 73% of the merchants who use BukuKas are located outside of tier 1 cities like Jakarta. Its users represent a good range of sectors, including retailers, food vendors, grocery markets, mobile and phone credit providers, social commerce sellers, wholesalers and repair providers. BukuKas acquired digital ledger app Catatan Keuangan Harian, which has 300,000 monthly active users, in September 2020 to expand its market share in Indonesia.
With its sizable amount of SMEs, Indonesia is seen as a desirable marketplace for companies helping the drive toward digitization. for instance , India’s Khatabook, which was valued between $275 million to $300 million after its last round of funding in May 2020, recently launched BukuUang in Indonesia. Other startups within the same space include Y Combinator-backed BukuWarung, Moka and Jurnal, all of which supply tools to assist SMEs bring more of their operations online.
Menon said BukuKas’ advantage is its team’s experience building businesses in Indonesia over the past seven years. For instance , it launched a “Know Your Profits” module supported user feedback. It also offers a self-guided onboarding process, an easy interface and an offline mode for users in areas with poor network connections.
“In general, individual features are often copied but we believe our ‘integrated end-to-end software stack approach,’ including our obsessive specialise in simplicity, deep understanding of our users and a superior level of service are going to be key in differentiating BukuKas from competing offerings,” he added.
BukuKas’ Series A are going to be used on user acquisition, its engineering and merchandise teams in Jakarta and Bangalore and to introduce new services for merchants. the corporate may eventually expand into other Southeast Asia markets, but “in the short term consolidating and further expanding our leadership within the SME space in Indonesia is our top priority,” said Menon.
