Jakarta-based wholesale e-commerce app Ula announced that it raised USD 10.5 million of seed funding, in a round led by the Indian arms of Sequoia and Lightspeed. SMDV, Quona Capital, Saison Capital, and Alter Global also participated, along with some angel investors.
Traditional retail contributes to nearly 80% of the retail market, employing millions of Indonesians. These small retailers are not only cost efficient but also have deep, personalized insights into consumer behavior that can be invaluable for a business. However, poor sourcing, inefficiencies in supply chain, inventory, and working capital management, prevents the small shop owners from taking advantage of what is a massive market opportunity, says the company.
“A typical store has an 8-10% cost advantage over modern retailers given that they are usually tax exempt, employ their own family and operate out of their homes,” said Derry Sakti, co-founder of Ula. “Yet they aren’t competitive for lack of access to best sourcing and limited and expensive working capital.”
Sakti explains that a grocery store might need to source inventory from up to 50 different sources—wholesalers and distributors—every week and sometimes order in bulk to get better rates, even when the store doesn’t need large quantities.
Launched in January 2020, Ula approaches the small retailers with a wide range of products, best prices, doorstep delivery, and pay-later options. It uses data science to provide working capital credit to retailers allowing them flexibility in payment for goods.
Expansion strategy
Ula’s current focus is on consumer goods, like FMCG and staples. At the moment, the company is in private beta and predominantly servicing East Java. Over the next year it plans to expand across the Java island and expand into categories such as apparel and electronics.
“With more Indonesian SMEs becoming open to adopting technology, platforms like Ula are an easy, affordable and scalable solution to help these retailers streamline their businesses,” said Abheek Anand, managing director of Sequoia Capital (India). “Ula has a highly experienced team bringing together the right mix of experience in local and global e-commerce, retail and fintech markets and we are excited to be early partners in this journey.”