Fore Coffee announced US$8.5 million funding and is challenged by a new competitor

The coffee startups were inspired by the success of Luckin Coffee in China

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Fore Coffee announced US$8.5 million funding and is challenged by a new competitor

Indonesia-based on-demand specialty coffee startup, Fore Coffee, announced that it has raised US$8.5 million in funding from East Ventures, SMDV, Pavilion Capital, Agaeti Venture Capital, and Insignia Venture Partners. The fresh investment will be used to accelerate innovation and improve its online-to-offline customer experience. Moreover, the startup will also invest in new product development.

Founded in August 2018, Fore Coffee promotes Indonesian specialty coffee, especially Arabica beans, believing this will enable local farmers with a certified organic farm and certified fair trade to get higher incomes.

“We roast the bean locally to keep its freshness, brew [it] professionally by trained baristas, and deliver it as and when the consumer wants it,” said Robin Boe, co-founder and CEO of Fore Coffee in a statement. “We use a mix of technology, our self-built mobile app and existing technology such as MokaPOS [a point-of-sales software] to track and monitor payment, Member.id as a loyalty platform, and Go-Food, GrabFood, and TravelokaEats as a distribution platform.”

Fore Coffee is the first coffee startup that integrates data, mobile application, and technology to offer a full online-to-offline experience for its customers in Indonesia. The mobile app allows customers to order a coffee and pick it up at a particular outlet or have it delivered it to their location. Several of Fore Coffee outlets are designed for delivery services only so customers can get their drinks faster.

According to the founders, they were inspired by how Luckin Coffee stole the limelight in the coffee industry in China, where it’s challenging Starbucks in one of the US coffee giant’s top markets.

“In terms of technology trends, we’re always several steps behind China and we eventually will follow what China does due to similar customer behaviour. So when most of the international coffee chains and local coffee houses in Indonesia are currently focusing on the offline market, we decided to bring it online,” Elisa Suteja, co-founder of Fore Coffee told KrASIA.

The mature digital ecosystem in Indonesia has allowed Fore Coffee to gain its momentum today. Fore Coffee’s mobile app was officially launched in December last year and has been showing a positive growth since then. “We already have 70,000 registered users in just two months. In December, only 30% of our orders were placed through the app, while the rest was made offline or via online delivery platforms. This month, most of our orders were made through the app and the number of users has increased 13-fold since December,” Suteja continued.

The partnership with mobile payment platforms also plays an important role in the growth of Fore Coffee. According to Suteja, Fore Coffee is currently teaming up with OVO and Go-Pay for mobile payments but is open to collaborating with more e-wallet platforms.

Fore Coffee currently delivers more than 100.000 cups of coffee every month. The firm claims that its app is ranked first in F&B category in Indonesia’s both Google PlayStore and iOS Appstore.

Luckin Coffee Inspiration

Fore Coffee is not the only one that is following Luckin Coffee’s footsteps in Indonesia. Kopi Kenangan is a competitor, and the small Tuku Coffee in Jakarta was a pioneer in working with delivery partners like Go-Jek to serve customers where they are.

A new “digital coffee” startup named Koppi joined the fray today. Koppi says it collaborates with the 2014 World Barista Champion and coffee consultant Hidenori Izaki to develop its beverage menus and to maintain the coffee quality. Izaki also serves as one of Luckin Coffee’s consultants.

“We were inspired by the success of Luckin Cofffee in China and we believe that Indonesia has a potential market for the online-to-offline coffee platform,” Koppi’s CEO Tony Arifin told KrASIA.

According to a survey that was conducted by Koppi’s team, there are several factors that influence a customers’ decision in purchasing a cup of coffee, namely speed, convenience, price, and coffee’s quality and Koppi is trying to answer those demands by providing a comprehensive service through its mobile app.

“We provide pre-order and fast delivery services, using high-quality coffee beans at affordable prices so that everyone can drink coffee every day,” Arifin said.

In terms of function, Fore Coffee and Koppi have similar features and services. However, price-wise, Koppi offers a more affordable range, from IDR18.000 (US$1.27) to IDR35.000 (US$2.48), while Fore Coffee ranges from IDR 28.000 (US$1.98) to IDR 42.000 (US$2.97). For deliveries, Fore Coffee has teamed up with Grab and Go-Jek while Koppi is currently collaborating with bicycle delivery service Westbike Messenger for delivery distances of less than two kilometres and with Grab Express for further distances.

Fore Coffee has 16 outlets today and aims to open 100 outlets by the end of the year. Koppi is still smaller with four outlets and targets to have 40 outlets this year. Koppi refused to reveal its current investors but the company said it’s optimistic that it will be expanding its services quickly. “Fundraising is not our main focus at the moment as our goal is to deliver good products and give reliable service to our customers,” Arifin said. “However, we’re surely open to any discussion regarding this matter in the future.”

Editor: Nadine Freischlad