Funds double down on digitalizing Indonesia mom-and-pop shops

JAKARTA — Global investors are intensifying bets that the digitalization of Indonesia’s mom-and-pop stores is the country’s next big growth sector.

BukuWarung, an Indonesian startup that provides services such as digital bookkeeping and enabling digital payments for warung — the local equivalent of mom and pop stores — said on Thursday it has raised $60 million in Series A funding from global investors.

The infusion comes after direct rival BukuKas said in mid-May that it raised $50 million in a Series B funding round.

Warung sell consumer products like instant coffee, snacks and cigarettes, and are vital to daily life, especially in smaller cities yet to be penetrated by modern retail outlets.

The two deals indicate global investors see the modernization through digital technology of Indonesia’s 3.5 million warung as the next frontier in the archipelagic nation’s booming tech scene, which is expected to be worth $124 billion in 2025.

Part of the allure for investors is that warung are more prevalent in rural areas and smaller cities, which are often digital laggards. That means startups operating in the sector have more room to grow far away from the ultracompetitive tech scene in places like the capital Jakarta.

“Small businesses are central to Indonesia’s economy and culture, yet they are forced to use products which don’t cater to their needs,” said James Fitzgerald, founding partner of Valar Ventures, which led BukuWarung’s funding round.

BukuWarung “close[s] the digital gap for millions of merchants across Indonesia, and lead[s] the charge towards a digital infrastructure that is more comprehensive and accessible,” he added.

It marks the first investment in an Indonesian company by Valar Ventures, which was co-founded by famed Silicon Valley venture capitalist Peter Thiel and suggests that the early investor in Facebook may increasingly be eyeing opportunities in Indonesia.

Bridgetown Holdings, a special purpose acquisition company, or SPAC, backed by Thiel and Hong Kong billionaire Richard Li, is said to be in talks with Indonesian travel startup Traveloka for a U.S. listing of the travel reservation company.

BukuWarung also said it received funding from other investors including partners at SoftBank’s Vision Fund in what it described as “the largest Series A round raised by an MSME player globally,” referring to micro, small and medium enterprises.

Yet, despite increasing investor interest, some have questioned whether such startups can ever be profitable. Subscriptions to their services could be too much of a burden on small businesses, while there is little money to be made from charging transaction fees on warung sales. Most of the shops make less than $70 in daily sales, according to research company Redseer.

And while competition is not an issue now, it may become one. Indonesia’s largest and better funded tech companies including Gojek and Tokopedia — which merged into GoTo — and Bukalapak are all actively engaged in the warung digitalization, as is Singapore-based Grab, which counts Indonesia as its biggest market.


Japan travel news, japan travel guides, japan holiday destinations and japan reviews

LATEST NEWS

NEWS RELATED

Realme GT smartphone with Qualcomm Snapdragon 888 SoC launched in Europe

BBK-owned smartphone brand Realme has launched its most powerful smartphone yet — called Realme GT 5G.The device is touted to be Realme’s inaugural product under the GT series and the first Qualcomm Snapdragon 888-powered handset. At the time of the launch, Realme said that ‘GT’ in the name is based…

Read more: Realme GT smartphone with Qualcomm Snapdragon 888 SoC launched in Europe

Realme GT 5G launched with Snapdragon 888 SoC, 120Hz AMOLED display, 65W charging support

Realme has officially unveiled its first Snapdragon 888 powered smartphone globally in the form of the Realme GT. The Realme GT arrives with a flagship chipset, a new and improved cooling system, a high-refresh-rate display, stereo speakers, and super-fast charging support. Realme GT 5G Price The Realme GT 5G features…

Read more: Realme GT 5G launched with Snapdragon 888 SoC, 120Hz AMOLED display, 65W charging support

Foxconn unit invests $36m in Gigasolar partnership to develop EV battery materials

REUTERS/Tyrone Siu/File Photo Taiwan’s Foxconn said a subsidiary has invested T$995.2 million ($36 million) in Gigasolar Materials Corp to develop electric vehicle (EV) battery materials. Foxconn, Apple’s main iPhone maker, said the investment via a private placement through a Taiwan-based subsidiary will make it the second-largest shareholder in Gigasolar, known for manufacturing…

Read more: Foxconn unit invests $36m in Gigasolar partnership to develop EV battery materials

Bank Rakyat Indonesia seeks to sell 23.25% stake in rights issue

Jakarta, Indonesia. Photo by Tom Fisk on Pexels. Indonesia‘s largest lender by assets, PT Bank Rakyat Indonesia said on Tuesday it will seek shareholders approval next month to conduct a rights issue that will enable the acquisition of two state firms. BRI plans to sell a maximum 28.68 billion shares in the rights sale, or 23.25% of its total equity, the company said in a…

Read more: Bank Rakyat Indonesia seeks to sell 23.25% stake in rights issue

China tells e-commerce firms to regulate promotional phone messages

Beijing, China China‘s industry ministry on Tuesday said that it had told e-commerce giants Alibaba, JD.com and Pinduoduo to regulate their use of promotional phone messaging to users ahead of the annual June 18 shopping festival. The directive, delivered during what the ministry said was a meeting on June 11, is the latest move in an…

Read more: China tells e-commerce firms to regulate promotional phone messages

Thai Airways clears legal hurdles to launch rehab plan

BANGKOK — A Thai court formally approved Thai Airways International’s rehabilitation plan on Tuesday, clearing all legal hurdles to set the plan in motion. “The Central Bankruptcy Court granted an order to approve Thai Airways International’s business rehabilitation plan,” the airline said in a statement. “The plan administrators and all…

Read more: Thai Airways clears legal hurdles to launch rehab plan

Google and Toyota Tsusho backed- mapping startup from London set to raise £10.3M

Started in South Africa and now headquartered in London, mobility technology company WhereIsMyTransport is set to close the second funding round for capital to expand its impressive portfolio of mobility data and solutions for emerging-market megacities. This will bring the total raised by the company during its Series A funding…

Read more: Google and Toyota Tsusho backed- mapping startup from London set to raise £10.3M

Google’s privacy backpedal shows why it’s so hard not to be evil

Representative image There is a saying in Silicon Valley that when a product is free, the user is the product. That’s a diplomatic way of describing what amounts to tech companies’ cynicism toward their own customers. Time was, companies worked to meet customer needs, but tech businesses have turned that…

Read more: Google’s privacy backpedal shows why it’s so hard not to be evil

People Digest: HQ Capital MD steps down; Endowus gets chief advisory officer

Facebook launches ‘Report it, Don’t share it!’ initiative to prevent online child abuse

Revolut vs Curve: Which one is best for you?

Used Gadget Specialist Aihuishou Aims for $261 Million IPO

Xiaomi’s foldable smartphone with Snapdragon 888 processor expected to launch later this year

Zebronics launches smartwatch with SpO2, blood pressure monitor and voice calling at Rs 3,999

How Apple Watch took on Fitbit, and won – but can Facebook steal the smartwatch crown?

BMW S 1000 R motorcycle launched in India at Rs 17.9 lakh

OTHER NEWS