BukuKas has hit several milestones in just eight months since its launch
Indonesia-based BukuKas, a financial management app for micro, small and medium enterprises (MSMEs), has raised US$9 million in its pre-Series A funding round, the company announced in a statement today.
The round was raised from Sequoia Capital India’s Surge, a scale-up program for startups in India and Southeast Asia, European early-stage tech investor Speedinvest, early- and growth-stage investor S7V, Asia Pacific venture investor January Capital, Saison Capital, the corporate venture arm of Credit Saison, and asset management platform Cambium Grove Capital.
According to the press release, the new funds will go toward expanding BukuKas’s product offerings and bolster its leadership in the Indonesian market.
BukuKas was founded in December 2019 by ex-Lazada executives Krishnan Menon and Lorenzo Peracchion, and aims to simplify traditional methods of bookkeeping. The fresh funding brings the startup’s total capital pool to $12 million within just eight months of its founding, the statement said.
BukuKas’s free smartphone app enables Indonesian business owners to monitor and manage their sales, profits and credit all in one place. It offers an alternative to the traditional pen-and-paper bookkeeping used by many Indonesian MSMES.
The Organisation for Economic Co-operation and Development (OECD) states that SMEs are responsible for nearly 97% of domestic employment, and make up for 27% of the country’s GDP. However, despite living in a digital age, many merchants and traders were stuck carrying out the laborious process of recording financial data manually, according to the press release.
BukuKas claims that small business owners can gain up to 20% in cost reduction and save valuable time with their app. The BukuKas app also uses WhatsApp to send reminders to clients notifying them of due credit, helping MSMEs streamline and digitize their financial records.
The startup has seemingly been embraced by small Indonesian merchants and retailers, with BukuKas stating that it has 800,000 users across 753 sub-districts in Indonesia. Further, it also noted that the app has processed over $1.3 billion in annualized value of recorded transactions so far.
“The speed at which BukuKas has grown in the last 8 months since launch has shown us that more than ever, Indonesian small businesses are ready to go digital,” BukuKas CEO & Co-founder Krishnan Menon said in the press release.
“73% of merchants are outside of tier-1 cities today – and very few products and services are built for them,” he added. “BukuKas is committed to reaching them, they are the real Indonesia, the spine of our economy. And helping them prosper is our only goal.”
The rising prominence of Indonesia’s fintech industry makes this a good time for fintech startups like BukuKas to firmly establish themselves in Indonesia’s growing fintech economy.
Timing and geographical constraints may play instrumental roles in shaping the future of Indonesia’s fintech market. In 2018, almost 40% of Indonesia’s youthful population were unbanked as a consequence of geographical constraints. Therefore, more customers may take advantage of online banking processes offered by fintech platforms.
Moreover, the effects of the current COVID-19 pandemic have led to an increase in the number of users switching from physical bank branches to online platforms. This is evidenced by Indonesia’s Bank Central Asia, the largest Southeast Asian lender, which reported a 91% annual increase in the amount of mobile banking transactions after the virus outbreak.
Additionally, Crowdfund Insider observes that over 60% of Indonesia’s 270 million residents are “within working age, which represents a significant market for Fintech lending projects.” This could hold promising indications for the fintech industry in Indonesia.
“The World Bank has lauded Indonesia as the country in East Asia with the most improvement in bringing its citizens into the formal financial system in the past three years,” KPMG Indonesia says in its 2018 edition of The Fintech Edge.
Until then, we’ll see what next steps BukuKas takes in the fintech sphere.
Top (L-R): BukuKas Co-founders Lorenzo Peracchione (COO) and Krishnan Menon (CEO). Image courtesy of BukuKas.