One month after completing Y Combinator’s accelerator program, BukuWarung, a financial technology startup serving small businesses in Indonesia, announced that it has received new funding from a list of high profile investors including partners at DST Global, Soma Capital and 20VC Has.
The amount of the funding was not disclosed, but a source told TechCrunch that it ranged from $ 10 million to $ 15 million. The new capital will be used to rent BukuWarung’s Technology team. TechCrunch first presented BukuWarung in July.
The round’s angel investors include several high profile founders and executives: William Hockey, co-founder of the financial technology platform Plaid; Justin Mateen, co-founder of Tinder; Superhuman founder Rahul Vohra; Scott Belsky, Adobe Chief Product Officer; Josh Buckley, Clearbit chairman and startup advisor; former Uber product manager Manik Gupta; Spotify̵
Founded last year by co-founders Chinmay Chauhan and Abhinay Peddisetty, BukuWarung targets the 60 million “micro-sellers” in Indonesia, including neighborhood store (or warung) owners. The app was originally designed to replace pen and apper ledgers, but plans to introduce financial services such as credit, savings, and insurance. In August, the company integrated digital payments into its platform, allowing merchants to withdraw customer payments from bank accounts and digital wallets such as OVO and DANA. BukuWarung’s goal is to play the same role for Indonesian traders as it does for KhataBook and OKCredit in India.
One of the reasons BukuWarung adopted digital payments was the response from customers to contactless transactions and instant withdrawals during the COVID-19 pandemic. Since the feature was first introduced, the company has processed millions of dollars in total payment volume (TPV) on an annual basis. The company currently serves around 1.2 million dealers in 750 locations in Indonesia, focusing on tier 2 and tier 3 cities.
Digital Payments is also the first step in building BukuWarung’s financial services which will help set it apart from other accounting firms. The payment features are currently free and BukuWarung is experimenting with different monetization models, including a low profit margin.
“The reason we introduced payments is also very strategic because the market has picked up strongly. We have already seen several million TPV on an annual basis in less than a month because the payments we offer are also affordable and cheaper than a bank, ”Chauhan told TechCrunch.
“If you look at Indian gamblers like Khatabook, they also introduced digital payments. The reason for this is that this is a very important step in building a business and monetizing, ”he added. “If you don’t have payments, you can’t do that.”
Chauhan added that building a financial services platform is the difference between providing a utility app that replaces the accounting books and providing an essential service to merchants that eventually includes lending for working capital, savings and insurance products. BukuWarung’s bookkeeping functions will feed into the financial services aspect by providing credit rating data and providing access to credit lines for small traders who often have difficulty obtaining working capital from traditional banks.