The digital revolution in Indonesia, the largest economy in Southeast Asia, continues to attract large sums of money from investors. Following a $ 50 million round for Bukalapak, a billion-dollar company that helps street vendors connect to the Internet, Warung Pintar, another startup that helps digitize the country’s vendors, has raised 27 $ 5 million for growth.
Bukalapak It is one of the largest e-commerce services in Indonesia and began serving local merchants, those who sell goods through roadside kiosks, last year, but eighteen-month-old Warungung Pintar focuses exclusively on those providers.
Bukalapak helps them gain scale through online ordering (it claims to have a base of 50 million registered users in Indonesia), but Warung Pintar digitizes kiosk providers all the way. At the most basic level, that means aesthetics; for all Warung Pintar vendors to get a bright and colorful kiosk. They also have access to technology that includes a digital POS, free Wi-Fi for customers, an LCD screen for displays, power bank chargers and more.
It’s a “smart kiosk” concept, essentially.
The project was founded in 2007 by East Ventures, a prolific early-stage investor who has backed unicorns like Tokopedia, Traveloka, and Mercari. This new money means that Warung Pintar has raised just over $ 35 million from investors to date.
The round, which is a Series B, included participation from existing sponsors SMDV, Vertex, Pavilion Capital, Line Ventures, Digital Garage, Agaeti, Triputra, Jerry Ng and EV Growth – East Ventures and Yahoo’s joint fund. They were joined by OVO, a payments company jointly owned by Indonesian mega-conglomerate Lippo, which has registered as a new investor and is sure to be highly strategic in nature. OVO works with people like Grab, and is struggling to gain a foothold in Indonesia’s fledgling digital payments space, which is on the rise among the country’s 260 million people.
All of these investors are betting that Warung Pintar can take off and bring greater functionality to street vendors and consumers alike.
The startup is in growth mode right now, so it’s not fully focused on monetization. The only fee is $ 5,000 from the vendor, which covers the cost of a new pre-fab kiosk, while all tech gadgets are provided free of charge to help kiosk owners interact with the local community. For example, East Ventures. He noticed that Go-Jek or Grab drivers tended to go by the kiosk shop near the VC firm’s office and were curious about how to increase engagement to benefit both parties.
“There will be many ways to collect and earn money,” East Ventures co-founder and managing partner Willson Cuaca said in an interview with TechCrunch. “Once we’ve built enough, we can manage the supply chain and then figure out how to make money.”
In fact, monetization might not be through fees for kiosk owners, explained Cuaca, who is the president of Warung Pintar. Since the company maintains points of contact with consumers, it is a product that can attract brands, manufacturers and others when it reaches the national scale.
While there has been promising progress and an adequate product market in Jakarta, Cuaca and his team see significant growth potential yet to be realized.
When we spoke to Warung Pintar just under a year ago, he had just raised a round of seeds and had been in operation for less than six months. Today, the business has 1,150 kiosks in Jakarta. However, it recently opened in Banyuwangi, East Java, which, along with other planned expansions, aims to increase its reach to 5,000 kiosks before the end of this year, Cuaca said.
There is no plan for regional expansion at this time, he added.
The business and model are fascinating, but they are conceived and executed in Indonesia, that is, it is not a problem that can be identified, mapped and solved from the United States, China or other markets. It’s the kind of tech and startup that’s helping change daily life in Indonesia, the world’s fourth-largest country by population. Local solutions have been rare in Southeast Asia, but there are growing opportunities that only local actors can serve and now the region’s VC corps is important enough to provide the necessary capital.