Mumbai-based Aavishkaar, through its Aavishkaar Frontier Funds (AFF), has led an undisclosed amount of series A investment into Indonesian e-commerce platform Qlapa. Existing backer Kapan Lagi Networks (KLN) also joined in the round, the startup announced today.
“We are planning to use the funding mainly for user acquisition and retention, as well as team building. We are currently a lean team of 35 personnel. Looking forward to doubling the number and moving to a bigger office) this year,” founder Benny Fajarai told this portal.
Qlapa is an online marketplace for handicrafts, based in West Jakarta, Indonesia. In January 2016, Qlapa raised a seed funding from Global Founders Capital (GFC), KLN, and angel investor Budi Setiadharma, which it had used to “to achieve product-market-fit and get initial traction in local handmade and craft market,” as described by Fajarai.
“In the past one and half year, numbers has supported our thesis in the market potential. We are happy with the progress and with this round of funding we’ll be able to quickly scale both supply and demand side of our marketplace,” he said.
Qlapa has over 4,000 curated crafters from all over the country in their platform, selling 65,000 unique crafts items ranging from clothes, jewelry, bags, to wallets and home decor products. Batik clothes, leather goods, and wooden goods are among Qlapa’s highest selling items.
The company claims to strictly curate its merchants – who mostly reside in Bandung, Jogja, Solo, Bali, Jakarta, Medan and Surabaya – allowing users shop in confidence. To ensure the best price for both crafters and buyers, Qlapa bans resellers from purchasing on the platform.
“By cutting down distribution chain, buyers can get the best price of the item before any major markups by resellers,” Fajarai explained.
“We believe Qlapa has a good competitive advantage in the e-commerce landscape, partly because we have unique crafted items. Its unique listed products set Qlapa apart from other e-commerce,” he added.
Fajari also claimed that some sellers have made “hundreds of million” from Qlapa alone. The startup is aiming to get more crafters – triple the amount that they have now – by the end of this year. From the demand side, the company plans to scale by using paid acquisition channels. On top of that, it will also strengthen organic acquisition channel and build “robust community among crafters and collaborate to reach more buyers.”
Aavishkaar’s Indonesia mission
Aavishkaar’s latest investment in Qlapa is in line with the firm’s ambition to step up investments in the country. CEO and managing director Vineet Rai had told this portal that it was hoping to invest in 10-15 Indonesian companies within the next few years while looking to raise up to $150 million for the region.
“We are looking at various sectors such as education, health, energy, agriculture, poultry, and dairy. Indonesian entrepreneurs have ideas that we have not yet encountered in India, and some of them are even developing solutions for global problems,” Rai had said.
“Of course we may not be able to invest everything to Indonesia. But we are expecting to realize at least half of that number,” he added.
Aavishkaar’s current funds for Indonesia is only between $15 million and $20 million, with a ticket size ranging from $500,000 to as big as $5 million.
According to Rai, Aavishkaar had big ambitions for Indonesia. In addition to bringing in investments, the company also wants to bring the entire ecosystem of social entrepreneurship to the country. Rai affirmed that Indonesia remains an attractive market for Aavishkaar. “If everything goes right, in the next 3-5 years, we will be bringing our debt funds, something that you don’t have here,” he said.
Aavishkaar has also recently announced plans to raise up to $150 million to invest in Africa. It aims to start raising around mid-2017 and expect to close the fund in 2018.
The Africa fund will be the second overseas-focused fund from the impact investor. It will also be Aavishkaar’s seventh fund. Aavishkaar is currently raising a $75 million Frontier Fund, which will invest in South and South-East Asia, its first overseas geography fund.