Indonesian fintech startup BukuWarung said on Thursday that it raised USD 60 million in a Series A round led by US-based VC firms Valar Ventures and Goodwater Capital. It’s the first investment in Indonesia for Peter Thiel’s VC fund, which was an early backer of London-based remittance platform Wise and German neobank N26. Other notable investors who signed on for this round include former GoPay CEO Aldi Haryopratomo and Victor Jacobsson, founder of Europe’s most valuable startup, Klarna.
BukuWarung will utilize the fresh capital to enhance its offerings, including QR payments and other financial services. The startup plans to triple its engineering and product team size across Indonesia, Singapore, and India this year.
“Over the last few months, we have focused on expanding our product features across accounting, commerce, and payments,” co-founder and CEO Abhinay Peddisetty told KrASIA. Less than six months after launching its digital payments service, the startup is processing around USD 1.4 billion in annualized merchant payments, making it ten times bigger than its nearest competitor, he said.
To date, BukuWarung has over 6.5 million registered merchants across 750 Indonesian cities and towns, with most of them operating beyond Indonesia’s metropolitan areas. The firm said it is on track to process over USD 10 billion in annualized payments by 2022.
“The impact of BukuWarung on Indonesian merchants has been uplifting to me, Chinmay, and the BukuWarung team,” Peddisetty said. “Some of our users were heavily affected by the pandemic and have since started their own businesses to stay afloat. These users tell us that navigating the challenges of running a business has only been possible through our digital infrastructure.”
Peddisetty claims that merchants receive their payments three times faster with BukuWarang, in turn increasing their working cash flow. The startup plans to add more offerings such as lending, savings, and insurance in the coming months.
Founded in 2019, BukuWarung’s mission is to digitize Indonesia’s 60 million MSMEs by providing accounting solutions and enabling digital payments for merchants. So far, the firm has raised a total of USD 80 million in investments.
Attracting global investors
Peddisetty said that Valar will support BukuWarung with its experience in scaling fintech unicorns. “They are a USD 1 billion fund, and several other Peter Thiel-backed funds will also prove helpful to us,” he said.
California-based Goodwater Capital has also backed other unicorns like e-commerce firm Coupang, which recently went public on the New York Stock Exchange. Peddisetty believes that there is increased interest from American VCs in Indonesia as digitization continues to rise. Other startups that help MSMEs digitize their operations and supply chains are BukuKas, Mekari, and Sirclo.
“BukuWarung has shown strong execution and traction on its products as it has served 6.5 million MSMEs,” said Adrian Li from early investor AC Ventures. “MSME and warung digitization is a long-term game and it’s still early days.”