By 2021, Indonesia was one of the worst-hit countries by Covid-19. While the entire nation faced supply and demand challenges on daily basis, its small neighborhood shops and cafes (warungs in Indonesian) saw the worst of it.
A great number of these small businesses were forced to completely shutter due to movement restrictions, while many did not survive.
From the government to the private sector, startups and policymakers alike sought solutions to help MSMEs weather the storm. Stakeholders needed to make sure consumers still had access to the products they needed and that – at the end of the day – warungs are able to deliver. During the chaos, one name that stood out from the pack was Ula.
Launched before the pandemic actually hit, today Ula is one of the most promising B2B wholesale e-commerce startups in Indonesia. It is modernizing the country’s millions of warungs by furnishing them with reliable inventory and delivery services, as well as essential working capital.
Investors have taken note of Ula’s quick adoption in the market. The firm has raised a total of US$117.5 million in less than two years. Ula’s marquee backers include AC Ventures, Tencent, Prosus Ventures, B Capital, Bezos Expeditions (the investment firm of Amazon founder Jeff Bezos), and others.
For the most part, however, the company’s entire journey has been right smack dab in the middle of the pandemic. But as the saying goes, ‘pressure makes diamonds.’ In Ula’s case, the company’s unique model and strong, down-to-earth fundamentals allowed it to thrive during an unprecedented bear market.
On a recent episode of Indonesia Digital Deconstructed, hosted by Adrian Li of AC Ventures, Ula founder and CEO Nipun Mehra shared some of the key lessons learned and challenges faced as his company took off during Covid-19.
Going beyond supply and demand
Nipun shared that the fast-paced story of starting Ula has been one of life’s most amazing roller coaster rides.
The founder explained, “When we started, Covid was not a phenomenon yet. At the time of our launch in December 2019, we were focused on consumer goods, as well as discretionary goods. I saw a few stories about the virus and I guess that’s where my instincts kicked in, having witnessed several global crisis situations back in 1999, 2000, and 2008. By March, it was clear that Covid-19 was a major global crisis. Luckily, by then, we’d already understood that essentials were going to be in high demand and we were ready to serve the world while saving, and in fact scaling our business.”
Ula took an agile approach. The firm quickly reallocated its resources from discretionary to essential goods. It noticed that now there were new variables in the market – movement was restricted and most places were shut down – but the demand was still there.
For example, Nipun explained, places in Jakarta like Tanah Abang were all understandably shut down, but MSMEs still needed to buy wholesale products from there. The supply and demand fundamentals were actually still in place, but they just needed a different kind of facilitation.
“We understood that small business owners didn’t want to go to a crowded market. They relied on us for deliveries and that’s where we had the opportunity to win their trust.”
June 2020 was transformative for the e-commerce startup because that’s when Ula set up its first warehouse. This was to ensure consistent supply. “We wanted to reliably deliver, rather than just connect supply and demand,” said Nipun.
The second most important thing for Ula was building a team, not only in Indonesia but across the region, including in Singapore and India. Nipun added, “We grew from a team of 25 to now 400 and that, too, was during the pandemic. We are very flat in the hierarchy of the company. We do town halls quite often with games and jokes – that’s how we have built a strong company culture, despite being a wholly remote team.”
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AC Ventures is a leading venture capital firm investing in early-stage startups focused on Southeast Asia. We are a generational partner to founders driving positive societal change and economic impact in Indonesia and beyond.