Existing investor Alpha JWC Ventures also participated in the transaction. While the specific financial terms were undisclosed, Fetter hinted in email communications to the press that it was a multi-million dollar investment. The investment will finance talent acquisition and expansion to other regional countries, such as the Philippines, Vietnam, Thailand and Malaysia.
Jualo claims to be the second largest marketplace for second-hand goods in Indonesia, and aims to use the proceeds of this capital raise to build toward Indonesian market leadership over the next 18 months.
“NSI Ventures is very pleased to lead this investment round in Jualo and help them to accelerate their product development and growth. We have been impressed by the progress of Chaim and the team and their sharp focus on innovation and value creation for buyer and seller in a rapidly developing market” commented Shane Chesson, partner of NSI Ventures.
Chesson explains: “Jualo solves users’ lack of trust in online transactions with its features and location-based search. We saw the growing number of transactions on Jualo. This pushed us to go forward with the investment.”
Founded in 2014 by Fetter and his friends, the Jakarta-based venture consists of a team of 15. With features as escrow, geo-location and home delivery services, the business has “positioned itself as a hybrid with the functionality of a marketplace and the broad product choice of a classic e-classifieds platform”, with both a mobile and desktop edition.
With new online marketplace users are being added every year, expectations are evolving among consumers. According to Fetter, Jualo is offering services suitable for this new generation of consumers and improving the liquidity of second hand goods. “With strong backers such as NSI Venture, Jualo will be able to become the marketplace of choice across Indonesia and emerging Asia” said indicates Fetter.
According to an October 2015 report by Ken Research, Indonesia’s e-commerce market has witnessed a significant growth in recent years, on account of rising demand for online products fueled by introduction of mobile applications. Jualos’ traction is likely a reflection of existing trends in the Indonesian e-commerce market.
The current growth surge originates from growth in the retail and travel as a segment of the e-commerce market. This has been largely led by domestic factors such as rising urban population, increasing disposable income, increasing product portfolio, a phenomenal growth of cell phones and large scale public investments. The Indonesia e-commerce market revenues have grown at a CAGR of 25.5 per cent from 2009-2014.
According to the study, Indonesia’s e-commerce market will grow at a considerable CAGR rate thus exceeding USD 16.4 billion by 2019, due to the increasing internet penetration and secure online payment gateways. However, challenges remain in the form of an inefficient transportation channel and the fraudulent image of online shopping.
Adrian Li, founder and managing partner of Convergence Ventures, notes in his Tech in Asia content feature: “Actually the major driver of ecommerce is demand from outside of first-tier cities where demand arises from scarcity, not convenience.”
Li adds, “People in Indonesia are buying online because they cannot buy the goods offline, so it’s a choice of delivery within a week versus not getting the item at all. In this instance, even if it takes a week, at least the consumer can now buy the item.”