Bukuwarung Secures $60M Series A Funding

BukuWarung Secures $60 Million Series A Funding

BukuWarung, a fintech company concentrating on Indonesia’s MSMEs (micro, small and medium enterprises), has announced the successful completion of a $60 million Series A funding round. This investment was led by Valar Ventures and Goodwater Capital, representing Valar Ventures’ inaugural investment within Indonesia.

Round Details and Valuation

The funding round was oversubscribed, indicating strong investor confidence. While the exact valuation remains undisclosed, industry sources estimate BukuWarung’s value to be between $225 million and $250 million.

Investor Participation

In addition to the lead investors, the round saw participation from existing investors and prominent angel investors. These include Aldi Haryopratomo, the former CEO of GoPay, Victor Jacobsson, a co-founder of Klarna, and partners from SoftBank and Trihill Capital.

Focus on Indonesia’s MSME Sector

Established in 2019, BukuWarung specifically targets the extensive network of over 60 million MSMEs operating in Indonesia. These businesses are vital to the Indonesian economy, contributing approximately 61% of the nation’s GDP and employing 97% of the workforce.

Comprehensive Services for Digitization

BukuWarung provides a suite of services aimed at facilitating the digitization of traditionally offline merchants. These include digital payments, inventory management, bulk transactions, and an e-commerce platform, Tokoko, modeled after Shopify. Many merchants began utilizing online ordering systems during the COVID-19 pandemic, accelerating the need for these tools.

Growth and Current Metrics

The company is developing what it terms an “operating system” for MSMEs. Currently, BukuWarung boasts over 6.5 million registered merchants across 750 cities in Indonesia, with a strong presence in Tier 2 and Tier 3 regions.

Annualized payment processing currently stands at approximately $1.4 billion.
The company projects to exceed $10 billion in annualized payments by the year 2022.

Total Funding and Future Plans

With this new round, BukuWarung’s total funding reaches $80 million. The company highlights its capital efficiency, noting that over 90% of previously raised funds remain unspent.

Future plans involve expanding the platform to incorporate additional financial services tailored for MSMEs, such as lending, savings, and insurance.

Competitive Landscape

This funding announcement follows a similar raise by competitor BukuKas, which secured $50 million in Series B funding less than a month prior. Both companies initially focused on digital bookkeeping applications before broadening their offerings to include financial services and e-commerce solutions.

Differentiation Strategy

Abhinay Peddisetty, co-founder and CEO of BukuWarung, emphasized that the market is not a “winner takes all” scenario. He stated the company’s primary focus is on delivering the most effective products for MSMEs, evidenced by their success in payments and accounting.

Peddisetty also noted that BukuWarung’s payments transaction volume is ten times greater than that of its nearest competitor.

Workforce Expansion and Product Development

The newly acquired funding will be allocated to doubling the current workforce from 150 to 300 employees, spread across Indonesia, Singapore, and India. Resources will also be directed towards enhancing BukuWarung’s accounting, digital payments, and commerce products, including the development of a comprehensive payments infrastructure supporting QR payments and other services.