Indonesia’s BukuWarung, an accounting app for micro, small and medium enterprises, has raised an undisclosed amount in pre-Series A funding led by Quona Capital, the former said in a statement.
The new round comes just three months after BukuWarung secured seed funding, and brings the company’s total funding to an “eight-figure” sum.
Existing investors, including East Ventures, AC Ventures, Golden Gate Ventures, Tanglin Venture Partners and Michael Sampoerna, backed the latest financing. The founders of Indian e-commerce company Snapdeal also joined the pre-Series A round.
Founded eight months ago, the BukuWarung app helps micro businesses track all transactions, including credit, expense and sales, and gain cash flow visibility through business reports. The startup claims to have served more than 600,000 merchants across 750 locations in Indonesia so far and aims to reach 1 million merchants in the next two months.
“We come from humble micro-merchant families ourselves and understand the challenges these businesses face in managing cash flow and accessing credit to grow their businesses. Our product is designed to work seamlessly for merchants who may not have a lot of space on their devices, or have lower-end devices or less data connectivity,” said BukuWarung co-founder Chinmay Chauhan.
Several startups and investors are focusing on Indonesia’s MSME segment, characterised by traditional warungs (mom-and-pop shops), that contributes over 60 per cent of the country’s $1 trillion GDP.
These businesses, which tend to rely on manual processes, have attracted a host of offerings from well-funded startups such as Warung Pintar, GudangAda and Wahyoo as well as e-commerce giants such as Tokopedia and Bukalapak.
East Ventures co-founder and managing partner Willson Cuaca said micro businesses is “the backbone of Indonesia’s hyperlocal economy” and is confident that BukuWarung is well-positioned to drive their digital transformation.
The company currently serves over 50 different micro-business categories, which includes mom-and-pop convenience stores, grocery stores, mobile top-up and electronics shops, wholesalers, traders, online sellers, and more.
According to co-founder Abhinay Peddisetty, the backing by Quona, which has experience investing in companies serving micro-businesses across emerging markets, including IndiaMART, Neon (Brazil), and Yoco (Africa), will help BukuWarung achieve its mission.
“Our vision is to build the digital infrastructure for 60 million MSMEs in Indonesia, which started with a simple accounting app and digital payments. Our lead investor, Quona Capital, has deep experience around financial inclusion in emerging markets, and is a great partner for us as we scale the digital infrastructure of Indonesia,” Peddisetty said.
Quona Capital co-founder and partner Ganesh Rengaswamy said the current pandemic highlights the urgent need for digitalisation of micro-businesses in the country.
“In this time of COVID-19, it’s never been more critical for businesses to migrate from manual tools to digital ones, and the solution BukuWarung has built not only allows underserved micro-businesses to focus on growth, it provides a platform to layer in additional services that benefit the businesses,” he said.
BukuWarung is the only Indonesian startup to be selected for the Y Combinator class of 2020. Y Combinator has previously funded Indian startups Khatabook and OkCredit, which operate in a similar space.
