Indonesia’s BukuKas lands $10m led by Sequoia Capital’s Indian arm
BukuKas, an Indonesian fintech serving small and medium-sized enterprises’ (SMEs) digital and accounting needs, landed a $10 million Series A led by Sequoia Capital’s Indian arm.
Existing investors also participated in the round. These include former PayU boss Amrish Rau, as well as Saison Capital, January Capital, Founderbank Capital, Cambium Grove, and Endeavor Catalyst. Total capital raised to date stands at $22 million.
Launched in December 2019, BukuKas says it already serves some 3.5 million small merchant and retail users from across Indonesia. That’s impressive growth in less than a year.
Beginning as a digital bookkeeping app, the start-up has since diversified its product lines. One such route has seen it develop an “end-to-end software stack” for small businesses.
In the longer-term, it intends to launch an SME-focused digital bank.
“The Jakarta bubble”
BukuKas’ CEO, Krishnan Menon, who previously worked at Alibaba-owned e-commerce firm Lazada Indonesia, explains why he and Lorenzo Peracchione – BukuKas’ chief operating officer – decided to set up the fintech
“One of the things that stood out was how different the Jakarta bubble is from the rest of Indonesia,” Menon tells TechCrunch. “All the way from the penetration of software to financial services.”
He says that despite SMEs’ large presence in Indonesia, companies weren’t building products with them at the center.
SMEs account for 60% of Indonesia’s gross domestic product (GDP), according to studies cited by The Jakarta Post.
Interestingly, as early as 2016, women-owned SMEs made up almost half of Indonesia’s SME market, as per International Finance Corporation (IFC) data.
Indonesia’s government is trying to encourage firms to serve this sector with digital products. Last year, it said it wanted some ten million micro SMEs (MSMEs) to go digital by the end of 2020.
In July 2020, only eight million MSMEs in Indonesia had an online presence. There are 63 million MSMEs in total, according to the latest Statista data.
With 3.5 million customers in total, around half (1.8 million) of BukuKas’ users are active. The platform transacts around $17.4 billion each year, which is more than 1% of the country’s total GDP.
As well as operating an online bookkeeping solution, BukuKas also provides SMEs with data. This data helps to inform other financial services.
Before long, the start-up realised the value in a complete software solution which helped SMEs digitise more areas of their operations. These include payment reminders for buyers via WhatsApp, automatically generated invoices and tools to analyse expense patterns.
This E2E offering foreshadows the eventual development of a digital bank. Before this, the fintech intends to introduce more payment-focused products.