Bukukas Secures $50M Funding

BukuKas Secures $50 Million in Series B Funding

Image Credits: BukuKas depicts BukuKas co-founders Krishnan Menon and Lorenzo Peracchione alongside a BukuKas user.

BukuKas, a company dedicated to the digital transformation of Indonesia’s small business sector, has successfully secured $50 million in Series B funding. Notable participants in this funding round included Gokul Rajaram, a key executive at DoorDash, and Taavet Hinrikus, the co-founder and CEO of TransferWise.

Recent Growth and Future Plans

This latest investment arrives only four months following BukuKas’s previously announced $10 million Series A funding, which was spearheaded by Sequoia Capital India. The newly acquired Series B funds will be strategically allocated to expand the engineering and product teams based in both Jakarta and Bangalore.

Furthermore, BukuKas intends to introduce a suite of innovative services tailored to the needs of its merchant base.

Strategic Funding Approach

“We have experienced substantial growth, attracting significant interest from prominent investors,” stated Krishnan Menon, the CEO of BukuKas, in an interview with TechCrunch. “This funding round wasn’t driven by immediate capital requirements, but rather by a desire to secure long-term support from the right partners.”

Company Origins and Evolution

Founded by Menon and Lorenzo Peracchione, the COO, while both were employed at Lazada Indonesia, BukuKas initially launched in December 2019 as a digital bookkeeping application.

Since then, the platform has evolved to incorporate features such as online payment processing and an integrated e-commerce platform.

To date, BukuKas has onboarded approximately 6.3 million businesses, boasting a total of 3 million monthly active users.

The company reports an annualized bookkeeping transaction volume of $25.9 billion USD, representing roughly 2.2% of Indonesia’s total gross domestic product.

Indonesia’s SME Landscape and Digitalization

Bank Indonesia, the nation’s central bank, estimates the existence of around 60 million small and medium-sized enterprises (SMEs) within the country, a figure Menon suggests could range between 55 and 65 million.

While the majority of these businesses currently operate primarily offline, a trend towards digitization was already underway prior to the onset of the COVID-19 pandemic.

For instance, the Indonesian government initiated a program two years ago, in collaboration with marketplace Blibi, to encourage greater online participation among businesses, aiming to facilitate their expansion into global markets.

Competitive Landscape

This increasing focus on digital adoption has spurred the emergence of numerous startups and services dedicated to assisting small businesses in establishing an online presence.

Key players in this space include Y Combinator-backed BukuWarung, WarungPintar, Grab’s Mitra GrabKios, and CrediBook, which focuses on wholesalers.

Khatabook, another portfolio company of Sequoia Capital India, previously launched BukuUang in Indonesia but has since withdrawn from the market.

Accelerated Digital Transformation

“A significant market shift is currently occurring, with businesses prioritizing digitization, particularly in the wake of a challenging year,” Menon explained. “Many are recognizing the need to modernize their operations, improve financial management, and embrace digital payment solutions.”

BukuKas’ Vision and New Services

BukuKas aspires to become a comprehensive software solution for micro, small, and medium enterprises, with a goal of serving 20 million MSMEs by the end of 2022.

This includes providing tools for inventory management, invoicing, payment analytics, and more.

Recent advancements towards this objective include the April launch of BukuKasPay, enabling merchants to make online supplier payments and accept digital payments via virtual bank accounts and e-wallets such as OVO, Dana, GoPay, LinkAja, and ShopeePay.

In September 2020, the company acquired Catatan Keuangan Harian, a digital ledger application, to broaden its market reach, followed by the introduction of Tokko, an e-commerce platform allowing MSMEs to establish online stores.

Approximately 1.3 million merchants have created shops on Tokko within the first six months of its release.

Tokko: A Simplified E-commerce Solution

Tokko is specifically designed for merchants who find larger marketplaces, like Tokopedia, overly complex, offering a streamlined alternative for building an online brand.

Diverse User Base and Revenue

BukuKas’ user base encompasses a wide range of businesses, including warungs (small stores), fashion retailers, electronics stores, social commerce sellers, and service providers.

On average, users generate several thousand U.S. dollars in monthly revenue, with some achieving revenues in the tens of thousands of dollars.

Integration with WhatsApp

The application is engineered to seamlessly integrate with WhatsApp, a widely used communication platform in Indonesia.

Merchants can leverage BukuKas to send automated payment reminders with integrated payment links to customers who purchase on credit.

Invoices and Tokko orders can also be dispatched through WhatsApp.

Menon highlighted that the widespread reliance on WhatsApp among Indonesian merchants simplifies user onboarding, as minimal changes to existing workflows are required.

This integration also fosters viral growth, as recipients of payment reminders or invoices may be prompted to explore and adopt BukuKas themselves.

Long-Term Vision

“Our strategy mirrors that of Square and Shopify in the U.S., prioritizing merchants and continuously developing solutions to meet their evolving needs,” Menon stated.

“This encompasses software solutions like the original BukuKas and Tokko, as well as expanding into banking solutions, starting with payments and ultimately offering a complete banking suite.

Our ultimate aim is for merchants to look back in five years and attribute their success in the digital era to BukuKas.”