Online grocer Freshcart‘s founders have secured $500,000 in seed funding from KK Fund, Cradle Fund and other private investors to launch a new portal for office supplies and services called Supplycart.
Freshcart was founded by Jonathan Oh and Soh Shangrong in 2014 as an online grocer where it served customers and corporate clients like Unilever, BP, Ecoworld, Alliance Bank with their pantry and fruits supplies,employee engagement initiatives, goodies for product launches, town hall events, health day talks and much more.
Supplycart targets a different segment, serving as a platform for small and mid-sized companies and their office managers, administrators or personnel involved with the procurement of office supplies and services.
Supplycart is looking at serving the 600,000 registered SMEs in Malaysia. “We have plans to launch more product and services verticals that would give more value and convenience to SMEs. “We are also constantly looking at partnerships to bring more value to businesses throughout Malaysia,” CEO and co-founder of Supplycart Jonathan Oh told DEALSTREETASIA.
At the moment, the company’s efforts are for growing the Malaysian market. However, the company is ambitious in bringing Supplycart to the region as well.
“With a new round of funding, Supplycart has been established to focus on the increasing demand of corporate orders with a seamless ordering and approval process,” Oh said.
He said that there is a massive opportunity in the usually overlooked space in procurement for office products and services. Streamlining and consolidating a business’ repetitive task and pain points keeps the office focused on remaining lean and productive, he said.
The nine office categories on Supplycart platform are office fruits, pantry supplies, IT rentals, furniture, office supplies and services such as catering, employees benefits, gifting and events.
“We see a great potential in small and medium enterprises. The cost of hiring and training office managers or secretaries to handle a traditionally time consuming task has never been addressed until now,” Oh said.
KK Funds’ general partner Koichi Saito noted that the investment in Supplycart originated from both their first and second funds, with the first fund not being fully deployed yet.
Pointing out that his outlook on logistics startups like Supplycart was positive, Saito told DEALSTREETASIA that all Southeast Asian countries have problems in their logistics industry and the market potential is huge.
Asked about the investment in Supplycart, Saito explained that the market potential is huge with a market size of more than $1 billion in Southeast Asia. There are a lot of offline traditional players in this space playing a dominant role in Southeast Asia and Supplycart is the one who is disrupting the space by focusing on tech, he added.
“It is highly possible to acquire market share from the existing traditional players as the online B2B commerce market is much less saturated compared with online B2C commerce. Supplycart has great founders and an operations-driven team that’s very hard working. Both Jonathan and Shangrong are serial entrepreneurs and have exit experiences. They have been bootstrapping the business for one and half years and it has been profitable,” he said.
In the similar line of business, there are successful models outside Southeast Asia, such as Askul in Japan which has a market cap of $2 billion. Further, the business space has several exit opportunities in Southeast Asia, Japan, China and the US.
In terms of there being room for partnerships and other synergies with their current portfolio of companies, Saito shared that Supplycart is working with TheLorry.com (Lorry) as a logistic partner which is in turn is working with Hostel Hunting (HH).
When asked whether he saw any of KK Fund’s portfolio firms expanding into mature markets like Australia or Japan, Saito opined: “I don’t really recommend them to expand there to obtain more business and clients but to go to other Southeast Asian countries. Most of our portfolio companies tackle local issues in Southeast Asia and their services most likely do not fit in developed countries like Japan and Australia.”
He suggested, instead of expanding into these mature markets, he would rather see Japan, China, and Australia as exit opportunities, given the corporates there are going to acquire startups in South East Asia for market expansion.