The backbone of Indonesia’s economy is small-to-medium-sized businesses, which 60% of its GDP is. Many still rely on manual bookkeeping, but the impact of COVID-19 has prompted small businesses to digitize more of their operations. BukkasOne of the many startups that helped SMEs online announced today that it has raised a $ 10 million Series A led by Sequoia Capital India.
Bukkas Launched as a digital bookkeeping app in December 2019, its range of services is expanding with the goal of creating an “end-to-end software stack” for small businesses. Eventually, it intends to launch an SME-focused digital bank.
The funding, which brings the total amount of Bucukas so far to $ 22 million, included returning investors Sesan Capital, January Capital, Founderbank Capital, Cambium Grove, Endeavor Catalyst and Amrish Rau.
As of November 2020, BukuKas had a registered user base of 3.5 million small merchants and retailers, and surpassed 1.8 million monthly active users. During that month, the platform recorded transactions of $ 17.4 billion on an annual basis, equivalent to a figure of more than 1.5% of Indonesia’s $ 1.04 trillion GDP.
Buccus was founded by Chief Executive Officer Krishnan Menon and Chief Operating Officer Lorenzo Perachione, who met eight years ago while working in Lazada Indonesia.
Menon’s previous startup was Fabelio, an Indonesian online home furnishing store. Every two months, he used to go to furniture sourced from small towns in Indonesia such as Jeppara and Cyron.
“One of the things that stood out was how different the Jakarta bubble was from the rest of Indonesia, from software penetration to financial services,” he told TechCrunch. Speaking to merchants and suppliers, Menon felt that “no one is building products with them as the center of the universe,” despite the fact that there are 56 million small businesses.
Perachione said that he and Maban had been considering startup ideas for some time. “When he told the SMEs about the idea of solving cash flow visibility, it immediately impressed me,” Perachione said. “My father used to own an SME and during childhood I used to first experience the ups and downs of running a small business.”
The two decided to get started with digital bookkeeping after talking to 1,052 merchants as helping to maintain their business performance would generate data which would in turn enable access to more financial services.
“Our vision expanded to provide an end-to-end software stack to digitize SMEs and help them in a wide range of activities as a prequel to create SME-focused digital banks down the line.” Menon said.
In addition to digital ledger features, BukuKas also sends payment reminders to buyers through WhatsApp and automatically generates invoices, includes an inventory management module and helps businesses analyze expenses to understand how their What is the effect on profit. The company plans to add digital payments this month. During the rest of 2021, it will introduce more features to help businesses for online sales, including online store fronts, promotional engines and social sharing tools.
Menon said, “With COVID-19, SMEs are in the running to be digitized, but they lack the right mobile-first tools to manage their business, along with selling online.”
The application focuses on small Indonesian cities and towns, as around 73% of merchants who use Bukkus are located outside Tier 1 cities such as Jakarta. Its users represent a range of sectors including retailers, food vendors, grocery markets, mobile and phone credit providers, social commerce vendors, wholesalers and service providers. BukuKas acquired digital leader app Catatan Keuangan Harian, which has 300,000 monthly active users, to expand its market share in Indonesia in September 2020.
With a large number of SMEs, Indonesia is seen as a desirable market for companies helping towards digitization. For example, India’s Khatab, which was valued at $ 275 million to $ 300 million after its last round of financing in May 2020, was recently launched in Indonesia by BukuUang. Other startups at the same location include Y Combinator-supported Buchuvarung, Moka and Journal, all of which provide tools to help SMEs bring more of their operations online.
Menon stated that Bucukas’ advantage in Indonesia over the last seven years is the experience of his team’s construction business. For example, it launched the “No Your Profits” module based on user feedback. It provides a self-guided onboarding process, a simple user interface and an offline mode for users in areas with poor network connections.
“In general, individual features can be copied, but we believe our ‘integrated end-to-end software stack approach,’ combined with our obsessive focus on simplicity, deepens our users’ understanding of service and better Level will be important. From competing offerings, “he said.
BukuKas’ Series A will be used to provide user acquisition, its engineering and new services to product teams and merchants in Jakarta and Bangalore. Menon said the company could eventually expand to other South East Asia markets, but “in the short term is our top priority to strengthen and advance our leadership in the SME space in Indonesia.”