Anchanto, a Singapore-headquartered SaaS-based technology company, plans to raise Series D capital as it eyes partnerships in South Korea and Middle Eastern countries to expand its operations beyond the home turf.
The company recently made a foray into Sydney (Australia) in June this year – a move that was prompted by the scope of cross-border business and transactions in the country.
Anchanto aims to makes online selling and e-commerce logistics simple and connects digital sellers, brands, retailers and warehousing companies on a single platform. Through its software, Anchanto helps companies manage product listing, promotion management, retailing, warehouse management, order processing, and cross-border shipping.
In the past 24 months, the company claims to have recorded $1.27 billion in GMV. It currently handles 35 logistic companies, over 95 e-commerce firms, and over 270 businesses across 14 countries. Its customers include corporates across diverse sectors such as Nestle, Luxasia, Transcosmos, DKSH, Telkom Indonesia, Pos Malaysia, Essilor, La Roche Posay, ASOS, VIP Plaza, and Bosnet, among others.
“We are setting aside some funding or around 10 per cent to establish our business in South Korea……the majority of the funding will be allocated to develop the local market,” Anchanto chief executive and founder Vaibhav Dabhade told DealStreetAsia. By local markets, he means Southeast Asian countries.
South Korea will be the first country on its radar going forward as the company chalks out its global ambitions. Anchanto plans to enter the market as early as December this year.
Dabhade bets big on South Korea as technology there, he says, is very well developed. However, he declined to disclosed details of the funding plans or the amount earmarked for expansion in the country.
“We see that a lot of South Korean retailers wanted to do cross-border business into the US, China, and especially Southeast Asia to meet the huge demand in those regions. So, this is a huge market for us,” Dabhade added.
Anchanto raised $4 million in Series C funding round in July last year, which was led by the investment arm of Indonesia’s largest telecommunication group MDI Ventures. Previously, the company raised $7.1 million in series B+ funding in 2017.
Anchanto, however, did not disclose the corpus raised in its series B and A funding rounds that were closed in 2015 and 2014, respectively. Its backers from those rounds include investors such as Asian omnichannel retailer Luxasia Group, which is also its customer, and Transcosmos Inc. Japan (TCI), a TSE-listed global end-to-end e-commerce enabler.
Anchanto is now planning to raise another round of funding, which could be its series D round.
“In total, we have raised close to $15 million in funding until now. So, we expect to raise double up or more than that total [$15 million] figure,” he said, refusing to give a breakdown on the previous undisclosed rounds.
“We will definitely need money for expansion. It would be in continuation of the current round or it could be some special run with some of our existing partners,” he added.
The fundraising exercise is expected to take place sometime next year.
Challenges in Southeast Asia
The rise of e-commerce business and the robust middle-class population have led to the rise of the logistics business in the region.
According to research by tech giant Google, and Temasek Holdings, the region’s e-commerce business is projected to reach $102 billion in sales by 2025 from $23.2 billion in 2018.
However, what plagues the industry is the paucity of digital infrastructure and insufficient payment system.
“Southeast Asia is growing very fast. People in the region are more comfortable in buying products online, but the challenges revolve around heavy cash-based payment system,” he said.
He added that Indonesia and the Philippines are two countries that still depend on cash transactions significantly, while Singapore and Malaysia are less dependent on that.
Anchanto is looking to launch a bouquet of features for the markets it is eyeing.
Apart from South Korea and Middle Eastern countries, Anchanto is also looking to set shop in North Africa and Europe.
Recently it entered Australia, a market that Dabhade says has huge potential.
“More and more Australian businesses aim to export to India or Southeast Asia…..they export products such as dairy, food supplement, and some fashion goods,” he said.
Anchanto currently has a signature SaaS-based platform called SelluSeller.com that help sellers and brands manage their inventory, catalogs, and orders across different marketplaces in Asia.
In August this year, Anchanto is looking to launch SelluSeller’s third version, which would be five times faster. Besides, it is also planning to launch its third generation of eWMs platform.
“Our new feature is created because we have learnt a lot from our users, partners, about the challenges they face… and we redesigned everything,” he said.
Anchanto also offers B2B and B2C e-commerce SaaS Warehouse Management System (eWMS) with an integrated Inventory Management System (IMS) and Order Management System (OMS).
Majority of the countries in the Middle East hold significant challenges for businesses with a fragmented market and a lot of inefficiencies. Anchanto sees it as an opportunity especially since the number of SaaS-based platforms operating there is a handful.
“The e-commerce business in Middle Eastern countries is not as mature as it is in this region [Southeast Asia]. It has a quite complex delivery system, with no proper postal system. Logistic is a challenge, with a fragmented market,” Dabhade said.