Indonesian startup BukuWarung, an accounting app for micro-enterprises, has raised funding from Rocketship.vc, and early backers of global fintech players Adyen, Nubank, Revolut, and an Indonesian retail giant.
Rocketship.vc, a Silicon Valley-based global investor, is also a backer in Khatabook, an Indian market leader in the digital bookkeeping space.
The financial terms of the round remain undisclosed.
A source familiar with the matter told DealStreetAsia that the startup has raised around $20 million in total funding so far.
In September last year, BukuWarung had raised an undisclosed amount from a host of investors after graduating from Y-Combinator.
The latest funding will enable the firm to expand its technology and product team in Indonesia, India, and Singapore.
“We launched a digital payments solution for our merchants, which has seen strong adoption and is already processing over $500 million in payment volumes. Our focus this year is to enhance our payment offerings and enable more digital payment use cases for our merchants,” BukuWarung co-founder Chinmay Chauhan said in a statement.
BukuWarung was founded in 2019 by Chinmay Chauhan and Abhinay Peddisetty, who previously worked at Carousell together.
To date, more than 3.5 million merchants have joined BukuWarung from tier 2 and 3 locations.
The startup claims that its technology helps the merchants to improve the bookkeeping process by tracking transactions including credit, expense, sales, and cash flow visibility through business reports.
The startup recently partnered WarungPintar and others to create an ecosystem to serve MSME needs.
BukuWarung is backed by Y-Combinator, Quona Capital, East Ventures, AC Ventures, DST Global Partners, Golden Gate Ventures, and Tanglin Venture Partners. Its angel investors include Michael Sampoerna, Plaid co-founder William Hockey, Snapdeal founders as well as strategic angels from Grab, Gojek, Stripe, Modalku, Xendit, Airbnb, Carousell, and Rapyd.
Other investors including Quona Capital also participated in the fundraise.
Alami is a licensed peer-to-peer lending platform focused on lending to micro, small, and medium-sized enterprises (MSMEs) through the principles of sharia finance. It provides access to sharia-compliant debt capital for MSMEs in Indonesia, as well as lending opportunities to individuals and financial institutions in the region.
“We believe that the existing players in the sharia financial industry have just utilized a fraction of its potential,” said Dima Djani, Alami’s founder and CEO. The social finance space, for example, can be further explored, he adds.
The company aims to grow 4x to disburse more than 1 trillion Indonesian rupiah (US$71.8 million) to sectors such as healthcare, farming, logistics, and food, among others.
The fundraise comes a year after Alami closed its US$1.5 million seed round, which was also led by Golden Gate Ventures.
Alami claims to be the largest licensed sharia P2P lender in Indonesia, posting a threefold year-on-year growth. The company also said it has 0% non-performing loans in its portfolio.
Indonesia’s new five-year roadmap for its Islamic finance industry should help drive its development, said Fitch Ratings. The plan targets a 20% market share for the sector – including banking, insurance, and capital-markets – by the end of 2024.
Indonesian digital investment platform Bibit has raised US$30 million of funding to further expand its products and services.
The round included participation from Sequoia Capital India as well as the startup’s existing backers East Ventures, EV Growth, AC Ventures, and 500 Startups.
Photo credit: Mohamad Trilaksono
Bibit was launched in 2019 by Stockbit, which had started off as a platform for investors to share news and investment strategies in real time. With Bibit, the company allows its users to build portfolios based on their individual risk profiles and investment goals through its mobile app.
Bibit also makes the process of investing easier for first-time users and millennial investors, which make up 90% of its total user base, with its robo-advisory services.
It currently holds a Mutual Funds Selling Agent license under the supervision of Indonesia’s Financial Services Authority (OJK), according to a statement.
Bibit CEO Sigit Kouwagam said the company saw significant growth since its launch, having over 1 million first-time investors jumping onto the platform in just the past year. The head chief attributed the growth to an increased awareness of and education on investing.
Citing IDX and Central Custodian data, the company said the number of retail investors in Indonesia grew by 56% year on year in 2020, with millennials accounting for 92% of the new investors last year.
“Stockbit and Bibit have been positively impacted during the pandemic,” noted East Ventures managing partner and co-founder Willson Cuaca. “It has a fast-growing number of retail investors, with more than 10x growth in transactions in 2020.”
Finantier, an Indonesia-based fintech startup, announced that it has raised an undisclosed amount in a pre-seed round led by East Ventures. AC Ventures and Genesia Ventures also participated in the round.
(From left) Finantier founders Diego Rojas and Keng Low / Photo credit: Finantier
The company was founded early this year by Diego Rojas, Keng Low, and Edwin Kusuma. Previously, Rojas had worked as software engineer of several startups in Asia and US, such as Dianrong and Lending Club. Low was an entrepreneur-in-residence at East Ventures, and Kusuma was an executive at Google and several fintech companies.
Rojas joined Antler’s accelerator program in 2019, but says that Finantier is his new startup that is not related to the program.
Finantier is a platform that can collect datasets from various banks and financial companies, enrich the data, and pass them to other companies through an application programming interface (API), a software intermediary that allows two applications to talk to each other. It calls this model Open Finance.
“Open Finance is a framework built on top of Open Banking principles, where consumers can securely access and use data they generate across multiple platforms to make the most of it,” says Rojas, Finantier’s chief executive.
The model allows the company to tap into the unbanked market, such as e-wallet users who haven’t been served by Open Banking platforms, he adds. Finantier is currently targeting fintech companies in Indonesia and Singapore to be its clients before expanding to conventional financial institutions later on.
According to Kusuma, the company’s COO, there are many fintech startups that don’t really have an expertise in technology. That’s why they need other services such as Finantier’s to help them with infrastructure and data products so they can focus on the operation side.
Finantier is still in development mode and doesn’t have any paid users yet. It is also in the process of talking to dozens of companies to get permission to access their data through API. It plans to launch the product within the next month or two.
The company currently has nine employees, with around half of them working on the technology side, while the rest are working on operations.
The “Alibaba” of Fishery, fishermen life turns for the better
Inviting the local heroes to go to the countryside and persuading its competitors to change careers
China has Alibaba, Indonesia has Aruna
In April 2019, Alipay and National University of Singapore held an innovation challenge (Alipay-NUS Enterprise Social Innovation Challenge), the winner of the competition is from Indonesia’s fishing B2B e-commerce Aruna. Indonesian President Joko Widodo openly praised Aruna at the ASEAN summit for helping fishermen increase their income by 20 per cent, an innovation that should be taken seriously. In August 2020, Aruna once again draws our attention as it received US$5.5 million in new fundraising round and achieved an 86-fold increase in revenue during the pandemic compared with the same period a year earlier. How does the “Alibaba” of fishery Aruna do it ?
1. The “Alibaba” of Fishery, fishermen life turns for the better
“My parents have always worked in the fishing industry, but the family is not in good financial condition. They sent me to college in the hope that I would get a good job and stop being like them.” But Utari Octavianty, Aruna’s co-founder, said he was puzzled: Why is Indonesia’s fishing resources so rich, yet its fishermen’s lives so simple? Indonesia has the second longest coastline in the world. The fishermen work hard along this 50,000 km coastline and the fishery market creates economic value of about US$1 trillion, but the average monthly income of fishermen is only US$84, and the number of fishermen is down 50 per cent from a decade ago.
Utari Octavianty, co-founder of Aruna
Upon investigating the reason behind it, Utari identified the pain points as well as a commercial opportunity. Lacking a transparent pricing benchmark, fishermen often ends up being exploited by the distributors. Layers and layers of supply chain further reduce the fishermen’s profits. In addition, the quality control of fish products is not managed well by fishermen, which lowered the quality of fish products and also affected its price. According to Utari, all of these factors contribute to a spread of more than 70% and so what’s missing in the middle is a platform that connects fishermen directly to their customers. Utari, who has a deep affection for the fishing industry, is determined to change that image and create a better life for the fishermen.
After graduating, Utari partnered with university friends Farid Naufal Aslam and Indraka Fadhillah in 2016 to create the Alibaba of Fishery – Aruna, to provide electronic trading platforms for fishermen and global business buyers. In addition to helping fishermen export 95 per cent of their seafood to East Asia, North America and the Middle East, Aruna also supplies restaurants, supermarkets and hotels in Indonesia. Moreover, Aruna partners with e-commerce platforms such as Tokopedia, Bukalapak, Shopee and Grab Mart, selling fresh seafood and processed seafood to consumers. With no traditional middlemen making the difference, the fishermen receive more money. With Aruna’s help, the average monthly income of fishermen has tripled to a range of US$240 to US$1035 a month.
Aruna fisherman fishing
Aruna’s has two kinds of revenue models, the primary one is to extract 10% – 20% of the commission from the transaction flow, followed by the subscription fee charged to the businesses. At the same time, in order to encourage fishermen to sell more to Aruna, Aruna also provides points to fishermen according to the number of transactions. Fishermen can go to Aruna’s offline store to exchange points for fishing gear and other supplies. Aruna currently has more than 30 offline stations throughout the island, and 2,000 fishermen from 16 provinces use Aruna.
2. Inviting the local heroes to go to the countryside and persuading its competitors to change careers
According to Utari, Aruna is characterized not only by technology empowerment, but also by community empowerment. The fishing community behind Aruna has three types of users: the fisherman who does the fishing, the fisherman’s wife who processes the seafood, and the local heroes or otherwise the account manager who teaches the fishermen how to use the Aruna mobile app. It is understood that Aruna’s account managers are mostly from fishermen’s families of millennial youth. They are more familiar with smartphones, which can help fishermen upload photos of fish products to platforms and help fishermen process transaction information.
Aruna Account manager ( local heroes ) is teaching fishermen to use the App
Account managers, or offline agents, are particularly common in rural Indonesia. Since rural users are not well educated in finance and technology, some banks will send account managers to the countryside to promote their financial products and teach them how to use these products. Indonesian e-commerce firm Kudo which got acquired by Grab and Indonesian fintech firm Payfazz that received new funding earlier adopt similar marketing strategy. Start-ups like Aruna is no exception. Fishing villages in Indonesia are generally located in remote areas, where it is not easy to promote e-commerce because most fishermen are not proficient in modern intelligent technology. At this time, it is necessary to have a person who can help fishermen to be familiar with the operation of e-commerce and help to complete the online transactions.
To solve the problem of user education, Aruna has to deal with competitors. In the same week that Aruna announced the news of its fundraising round, eFishery, another platform focused on Indonesian fisheries, announced the completion of series B financing, suggesting that the trillion-dollar fishing market had already been targeted by entrepreneurs. But eFishery is not a direct competitor to Auna, because the former focuses on fish farming and the latter on fish products, Utari said.
Arunas most direct rival is the traditional offline distributor and middleman. They hold information of the fishermen in every area, and the fishermen are also very familiar with them, he said. In order to compete with these middlemen, on the one hand, Aruna needs to strengthen its ties with the existing fishermen’s community; on the other hand, Auna needs to convince its competitors and persuade middlemen to become employees of Aruna. They can be local heroes, an account manager who goes to the countryside, or they can join the quality control group, since they not only know how to deal with fishermen, but also know how to distinguish the quality of fish products, Utari said.
3. China has Alibaba, Indonesia has Aruna
In the process of development, Aruna overcame plenty of obstacles, but the COVID-19 situation this year still poses as major roadblock. The international logistics blockade brought about by the pandemic has directly cut off the financial routes of many export traders. Utari points out that the biggest problem is in logistics, but consumer demand for seafood is still there. In order to reduce the impact of the pandemic on the overall business of Auna, Aruna launched the domestic business Seafood by Aruna, a year in advance in order to supply domestic retailers and ecommerce. In addition, Aruna continues to negotiate with the government to request the opening of green logistics channels to ensure the smooth export of seafood. As a result, Aruna’s revenue rose 86-fold in this special period from a year earlier.
Utari is not only confident but also ambitious about the future. “Each country has its own advantages, entrepreneurs use this advantage to create a global company. For example, China’s manufacturing industry is developed, and then there is Alibaba. Indonesian fishing industry is developed, so we have Aruna.” While Alibaba’s purpose is: let the world have no difficult business, Aruna’s purpose can be summed up as: let the fishermen have no difficult business, let the sea create a better life for the fishermen.
It has a big impact on us, Utari said of Alibaba. After winning the Alipay-NUs Innovation Challenge, the Aruna team was invited to Hangzhou to visit Alibaba’s office and listen to Alibaba’s growth history. “Alibaba has turned China from a less digital country into a very digital country. If Alibaba’s business can succeed in rural areas, I believe we can too.”
KitaBeli, an Indonesia-based social commerce startup, said it has raised an undisclosed amount of seed funding led by East Ventures. AC Ventures and some angel investors also participated in the round.
Founded in March this year, KitaBeli is a startup that sells daily essentials, fast-moving consumer goods (FMCG), and other household items. But unlike other ecommerce platforms that also sell the same products, it allows users to buy in groups with their friends and get discounts, similar to Pinduoduo’s group-buying scheme.
According to the company, rice and noodles are the best-selling items on its platform. It usually sources its products from wholesalers.
KitaBeli refused to share its transaction figures, but claimed that the average customer buys more than 6x every month. It also claimed that 95% of customers’ orders are delivered within two days.
The startup said it plans to use the new funds for product development and regional expansion to Tier 2, Tier 3, and Tier 4 cities in Indonesia. Currently, it serves customers only within the Greater Jakarta area.
What problem is it solving? According to Prateek Chaturvedi, co-founder of KitaBeli, he founded the company after observing how social Indonesians are. “They love to share information about deals, discounts, and purchases with their friends and family. We saw that other platforms have not been able to tap into this behavior,” he said.
Most of the company’s earliest users came from online groups of mothers and housewives. Since then, almost all of its new users are people who have been invited to the app by old customers.
What are the opportunities? Based on Google’s recent e-Conomy Southeast Asia report, the ecommerce market in Indonesia is predicted to reach US$82 billion in 2025. But despite the existence of ecommerce giants like Tokopedia and Shopee, the country still saw the rise of social commerce startups that are trying to attract users – mostly those who are living outside of Greater Jakarta – and boost transactions in a different way. Most of these startups are reaching customers via a network of agents and resellers.
KitaBeli is quite different from the pack because it focuses on the direct-to-consumer approach through group-buying schemes.
“KitaBeli introduces group buying to one of the fastest-growing ecommerce markets,” said Willson Cuaca, co-founder and managing partner of East Ventures.
According to Adrian Li, managing partner of AC Ventures, FMCG ecommerce in the country still has significant room for growth, especially in Tier 2 and Tier 3 cities. KitaBeli’s group-buying approach can create a sticky user experience that could result in high frequency of transactions, he added.
Who are the team members? KitaBeli was co-founded by Prateek Chaturvedi, Ivana Tjandra, Subhash Bishnoi, and Gopal Singh Rathore.
Indian entrepreneur who spotted opportunity in Indonesia
Enabling 900,000 MSMEs in Indonesia
Get a lot of VC big coffee to invest first
In Indonesia, 60 million MSMEs contribute 60% of the country’s GDP but these small and medium-sized enterprises that create great economic value are still operating manually and relying on manual accounting. Abhinay Peddisetty and Chinmay Chauhan, two longtime Indians working in Southeast Asia, are determined to change that. In 2019, BukuWarung, an accounting application focused on electronic bookkeeping was launched to help microenterprises manage their cash flow and credit transaction records.
Although BukuWarung was founded only a year ago, it has gained East Ventures, Golden Gate Ventures, Tanglin Venture Partners, AC Ventures, Quona Capital and other prominent Southeast Asian VC investment. Compared to the mature accounting software application market in China, what kind of business model can BukuWarung offer?
Founder of BukuWarung Chinmay Chauhan（left) & Abhinay Peddisetty（right)
1. Indian entrepreneur who spotted opportunity in Indonesia
Abhinay Peddisetty, co-founder of BukuWarung, said: “SMEs have long relied on pens, paper and calculators to record financial data such as revenue, expenditure and outstanding accounts, But this approach is so backward that banks and financial institutions will not agree to provide financial services to them.” He and his co-founder, Chinmay Chauhan, both come from small business families in India and have a deep sense of the challenges small businesses face in managing their cash flow and keeping track of their credit records. After working in Southeast Asia for 7 years, Chinmay, who worked at travel unicorn Grab, e-commerce company Kudo in Indonesia, and Carousell in Southeast Asia, found out that there is also a huge gap in digitalization for Indonesian MSMEs.
Chinmay Chauhan, co-founder of BukuWarung
“Every working experience has been meaningful, which has brought me into contact with various micro-entrepreneurs such as the driver of Grab, the agent of Kudo, the seller of Carousell etc. It also helped me understand what SMEs really need. In addition, I have met many excellent colleagues in every work experience, some of them later became Buku Warung angel investors.” Chinmay observed that millions of SMEs in Indonesia use Whatsapp and Facebook, but rarely use enterprise related app, which affected their growth in online businesses. As a result, this also creates a bigger opportunity to do enterprise services.
At the same time, they are seeing players in India already working on financial enterprise services such as the billing application Khatabook and the credit management application OkCredit. “Now that we have similar problems in Indonesia, we decided to solve them.”, according to Chinmay. It took Abhinay Peddisetty and Chinmay Chauhan more than three months to visit several different regions in Indonesia before the official launch of BukuWarung, They have also spoken to more than 400 merchants one-on-one about the challenges they face in bookkeeping, credit history and computing.
2 .Enable 900,000 MSMEs in Indonesia
When it comes to financial type of enterprise application, China primarily focuses on financial SaaS products, and the market development has reached a relatively mature stage. Financial SaaS has different functions depending on the size of the customer. According to the introduction of linear capital, the financial management SaaS product functions of such small and micro enterprises in China are mainly divided into three categories: agent accounting, travel reimbursement, cost control. Examples are Zhang Wang, Yun Zhang Fang, Yi Kuai Bao, Fei Kong Bao etc. For larger enterprises, the financial SaaS product service chain is also longer, to provide one-stop financial cloud services for enterprises.
Source: Linear Capital
However Indonesia’s MSMEs are lagging far behind China, and the financial services they need are actually more basic. A more primitive approach is required to analyze the market’s pain points: how do we shift from a manual accounting model that relies on pens, paper and calculators to an online digital model. As a result, Abhinay Peddisetty and Chinmay Chauhan decided to start devising a solution that offers electronic bookkeeping.
Replacing traditional bookkeeping with BukuWarung
BukuWarung is a basic accounting application that helps microenterprises manage their cash flow and credit transactions through electronic bookkeeping, recording data on credit, spending, sales, etc. At the same time, BukuWarung is able to generate financial reports based on these data records to help companies understand the cash flow changes. Recording credit transactions is a very important part of merchant management funds. Credit here usually refers to the credit loans given by small businesses to customers or suppliers, which can also be regarded as a form of credit. If these accounts cannot be recovered in time, it will affect the cash flow of businesses.
Replacing traditional bookkeeping with BukuWarung
“Because they are familiar with the people around them, small businesses often allow customers credit, up to 1 million rupiah (about 471 yuan). But at the end of the month when it is time to collect the money, businesses will go to their customers’ homes personally to ‘chase the debt’. Some business owners might feel embarrassed.” Chinmay points out the difficulties merchants face in collecting money. BukuWarung calculates monthly receivables based on credit records and sends automated payment reminders via text message or WhatsApp to get them to pay back on time. This not only avoids the embarrassment of face-to-face collection, but also allows businesses to increase the speed of collection three times. In order to better record credit transactions, Buku Warung also acquired Lunasbos, an Indonesian credit recording app.
Merchants using BukuWarung
In the process of talking to merchants, Chinmay learned that most people still use pay-per-view traffic and low-end smartphones, therefore he thinks BukuWarung should be designed to be as lightweight as possible and work well with poor network reception or even without network. BukuWarung is half the size of the other contenders at 6MB. “BukuWarung is simple to use, has low memory, and is fast, especially popular with small and micro businesses. BukuWarung has a higher usage rate than any enterprise service App.” Chinmay confidently remarked about BukuWarung.
So far, BukuWarung has served 900,000 MSMEs in 750 cities and towns in Indonesia, Covering street stalls, grocery stores, mobile recharge points, wholesalers, traders, online sellers, more than 50 different categories of businesses.
3. Get many VC big guy scrambling to invest
In April this year, BukuWarung carried out seed round financing, led by Indonesia’s early venture capital East Ventures, Southeast Asian venture capital AC Ventures, Golden Gate Ventures, Tanglin Venture Partners and so on. Michael Sampoerna, founder of Snapdeal, an Indian ecommerce, was also involved in the investment, after investing in Khatabook, an Indian bookkeeping software. In addition, angel investors from Grab, Gojek, Flipkart, Xendit, PayPal, Rapyd, Alterra and ZEN Rooms have also invested in BukuWarung. Three months later, BukuWarung followed the pre Series-A round of financing, led by Quona Capital, which focuses on emerging market financial technology, and many existing investors continue to do so.
After a year or so in business, BukuWarung has attracted many big VC’s attention. At the same time, BukuWarung participated in the Startup Acceleration Program of the American Seed Accelerator Y Combinator. Y Combinator partner Gustaf Alströmer is bullish on BukuWarung – “There is a big opportunity for emerging markets to build digital infrastructure, especially in the post-pandemic era. We see BukuWarung following the path taken by the Indian financial apps Khatabook and OkCredit, and we believe it will also empower Indonesian microenterprises.”.
When it comes to the outbreak, Chinmay believes that this particular period has indeed allowed BukuWarung to develop further. “From my first visit to Southeast Asia seven years ago, I have observed a steady increase in Internet penetration in Indonesia every year. In the past six months, due to the impact of the pandemic, more and more enterprises choose to carry out online business to gain more customers. In such a special period, they need to have a good product to help them manage the cash flow.”
Meanwhile, BukuKas, an Indonesian electronic bookkeeping app, received a seed round led by Sequoia India in May and announced last week that it had secured US$9 million in pre Series-A round financing. In early August, Credibook, an Indonesian debt management application, received seed funding from Singaporean venture capitalist Insignia Ventures Partners and Indonesia fintech company Payfazz. Whether its BukuWarung, BukuKas or Credibook, they are all very young, and they all target the accounting needs of Indonesia’s MSMEs. Chinmay said “It is a very big market that can accommodate a lot of players. And what we should compete truly, is converting the merchants’ manual bookkeeping habits into digital bookkeeping.”
Aquaculture startup Aruna has announced it had closed a US$5.5 million deal in the latest funding round with its current investors, on the back of the company’s astronomical surge in revenue in the first half of the year
Aruna raised the funds from top Indonesian venture capital firms AC Ventures, East Ventures and SMDV, the venture capital arm of the Sinar Mas Group.
The fishery startup plans to use the fresh capital injection to expand its community of fishers to help improve productivity, product quality and standards. The aquaculture platform currently works with thousands of fishers in 31 coastal areas across Indonesia.
Aruna also intends to use the capital to scale up its domestic business-to-business (B2B) market as well as its export market to East Asia, Southeast Asia, Middle East and North America.
“E-commerce helps create fairness and transparency in the fishing industry, as well as a more efficient supply chain. [In] reaching more coastal areas across Indonesia, Aruna is supporting economic equality in Indonesia,” Aruna CEO and cofounder Farid Naufal Aslam said in a statement on Wednesday.
Farid stated that the company’s revenue in the first half of 2020 grew 86 times compared to the same period in 2019, on the back of strong global demand for fresh seafood products despite the pandemic.
“This is a company that has been positively impacted by the [health] crisis and we are excited to double down on them,” said East Ventures cofounder and managing partner Willson Cuaca.
Aruna also launched a home delivery service for seafood products called Seafood by Aruna to capitalize on the rising demand for food deliveries during the health crisis.. The service is currently available in Greater Jakarta, Bandung in West Java and Balikpapan in East Kalimantan.
Meanwhile, Aruna is seeking new partnerships with resellers after launching its official stores on online marketplaces Tokopedia, Shopee, Bukalapak and GrabMart, as well as online grocery stores Sayurbox, Nalayan and Delisari.
Another Indonesian aquaculture startup, eFishery, recently announced it had closed its series B funding round led by Go-Ventures, the venture capital arm of Gojek, and the Northstar Group. The company reported that it had quadrupled growth and profitability in the last two years.
Accounting application for micro, small and medium enterprises (MSMEs) BukuWarung announced Tuesday that it has raised an undisclosed amount from pre-series A funding, bringing its total funding to date to an “eight-digit figure”.
The new round of funding was led by fintech-focused venture firm Quona Capital, along with East Ventures, AC Ventures, Golden Gate Ventures, Tanglin Ventures Partners and Michael Sampoerna.
“Micro-businesses have always been underserved in Indonesia and have very little access to quality financial services. They have long relied on pen, paper and calculators to track cash and credit transactions,” BukuWarung’s cofounder Abhinay Peddisetty said in a media statement on Wednesday.
Small businesses, which make up around 60 percent of the country’s economy, are suffering from slumping sales due to the coronavirus outbreak that has pushed customers to stay home and has hurt demand.
The government aims to have 10 million micro, small and medium enterprises (MSMEs) go digital by the end of the year to help ease the financial impacts of the pandemic, Cooperatives and Small and Medium Enterprises Minister Teten Masduki said earlier this month.
BukuWarung claimed it has more than 600,000 SME clients across more than 750 cities, mostly in tier two and three cities in Indonesia, and aims to build digital infrastructure for 60 million MSMEs in the country.
He went on to say that by using BukuWarung, merchants could receive credit repayments three times faster, improve their cash flow through automated payment reminders and be able to save on average Rp 110,000 (US$7.63) in bookkeeping expenses.
“Our product is designed for merchants that may not have a lot of space on their devices or weak data connectivity,” said BukuWarung cofounder Chinmay Chauhan, adding that the company served more than 50 different categories of businesses, including mom and pop convenience stores, grocery stores and mobile top-ups, among other businesses.
Serving micro-businesses is important to the growth of inclusive emerging economies, especially during the COVID-19 pandemic, Quona Capital cofounder and partner Ganesh Rengaswamy said.
“It’s never been more critical for businesses to migrate from manual tools to digital ones during this time, and BukuWarung not only allows underserved micro-businesses to focus on growth, but it also provides a platform to layer in additional services that benefit the businesses,” he said.
“MSMEs are the backbone of Indonesia’s hyperlocal economy and we really believe the next wave of innovative startups will come from digitizing this segment,” said East Venture managing partner Willson Cuaca.
BukuWarung received seed funding in April led by East Ventures as well as angel investment from Grab, Gojek, Xendit and PayPal, among other investors.
The company partners with Indonesia’s tutoring centers, which are an essential service for many students.
Tutoring centers are a popular choice for Indonesian students who are after supplementary lessons outside of school. But now, with Indonesia’s traffic getting worse and the fees for tutoring classes soaring, students are increasingly choosing to go online for their tutorial sessions. Education tech apps are seeing a surge in usage and traffic, and they are eating into the market share of the 619,947 brick-and-mortar tutoring businesses in the country.
But if something works, why not bring it into a new era with some updates? Marc Irawan and Abhay Saboo came up with the idea to provide tutors with the means to conduct their lessons online. The platform is called CoLearn. “Our app makes both teaching and learning easier by offering online classes, as well as livestreamed homework and exam assistance,” said CoLearn’s co-founder and CEO Abhay Saboo in an interview with KrASIA.
PASSION FOR EDUCATION
Both of CoLearn’s founders care deeply about ensuring the next generation receives the best possible education. Saboo had originally planned to set up a chain of tutoring centers called IQ Education in India in 2008. His friend, Irawan, ran his family’s management consulting business but taught STEM classes for kids on weekends. With their interests aligned, Saboo asked Irawan to help develop the coding content and curriculum for the tutoring centers he intended to open.
“I eventually gave up on the idea during a trip to visit my family in Jakarta. I realized how much I loved Indonesia and decided that this is where I want to build something that would have a positive impact on the country I consider home,” said the Harvard graduate.
Indonesia is the world’s fourth most populous nation, yet its students consistently rank in the bottom 10% in global benchmark tests. This may be partially explained by the fact that less than 15% of parents in the country have attended college, so despite their best intentions, they simply may not know what classes, preparation, or instruction their children need to become more competitive.
Parents tend to send their children to tutoring centers to help them improve their grades. However, not all of them have the time to drive their children to the classes because of their work. For the same reason, they may not be able to help their kids with their studies at home.Saboo realized that phones and tablets, which are already in nearly all households, could bypass that problem. The children could access tutors and materials in the comfort of their homes, according to their own schedules. No travel would be needed.
Irawan loved the idea. With Saboo’s help, he managed to convince his family that taking the plunge with CoLearn was the right thing for him to do.
ASSISTING TUTOR CENTERS
CoLearn started by partnering with tutoring centers and providing them with interactive online functionality, such as the infrastructure needed for video classes. But Saboo observed that most students did not find pre-recorded videos to be all that engaging. The content just didn’t have the impact of offline classes.
Unlike other platforms that rely on ready-made video tutorials and online quizzes, CoLearn implements a hybrid of online and offline learning. This way, they can provide a better fit for each student’s needs and preferred learning methods. “For example, some teachers with more expertise and experience may teach larger groups, or, some students may feel more comfortable learning in small groups,” Saboo said.
CoLearn’s app went live in January 2020. It features a practice platform with mock quizzes, giving students the space to learn independently, at their own pace, with hints and solutions to each problem. It also has a dashboard that helps tutors gain a better understanding of each student’s strengths and weaknesses. There are also tutorial videos as well as livestreamed classes.
As its user base grows, the startup is opening the platform to instructors who are not associated with tutoring centers. In just five months, the company has recruited 200 teachers for the platform, with 3,000 student users and 65 tutoring center partners—offering lessons in all subjects. Most of CoLearn’s users are students between elementary school and high school.
CoLearn’s partnerships with tutoring centers, and not only individual tutors, is what makes them stand out from other education tech companies.
Because of COVID-19, schools in Indonesia are closed, so education tech apps have become crucial in many households. CoLearn has seen livestreaming numbers on its platform go up 20 times, and expects even more people to sign up and log on in the coming months.
CoLearn is a member of the third cohort of Sequoia India’s accelerator program, Surge. The company has already received an undisclosed amount of funding from Surge, Alpha JWC Ventures, and AC Ventures. “We aim to become one of Indonesia’s favorite destinations for students in the next six to 12 months,” Irawan said.
In the long term, the pair would like to see students using CoLearn perform in the top of 50% of the benchmark test PISA, so that they are set up to compete on a global level. “Our priority now is to reimagine ourselves for a post-COVID world, so we can maintain and even increase our traction once current restrictions start to ease,” said Saboo.