E-Commerce Startup Ula Receives IDR 290 Billion Funding
Marketplace startup Ula received series A funding of US$ 20 million or around IDR 290 billion. This startup, which focuses on providing solutions for Micro, Small and Medium Enterprises (MSMEs), is also planning to expand. The funding was led by Quona Capital and B Capital Group. Other participating investors are Lightspeed India and Sequoia Capital India.
Last year, Lightspeed and Sequoia were the main investors in Ula’s initial funding of US$ 10.5 million or IDR 148 billion. Ula Nipun Mehra’s Co-Founder and CEO said the new funding will be used to make the expansion plans a success. In addition, for product development and launching new services.
The startup, which was established in early 2020, provides marketplace and business capital services for MSMEs. Businesses can also get merchandise through Ula, with delivery and payment options selected directly on the platform. Ula is targeting the UMKM segment because its potential is considered large.
“Small retailers or MSMEs are very much integrated with the Indonesian economy and culture,” Nipun said in a press release, Thursday (28/1). He noted, the average stall contributed almost 80% in developing countries.
In Indonesia, the value is estimated at US$ 200 billion to US$ 250 billion with an average growth rate of US$ 15 billion per year. In their operations, small retailer groups have a cost advantage of 8-10% when compared to modern retailers, because they often employ family members and operate from home.
In addition, they also have a deep insight and understanding of consumer behavior in their region. However, these small retailers have difficulty providing product stock efficiently, limited access to technology solutions at affordable prices, and high working capital costs. This hinders their business’s ability to be more competitive and grow.
Presenting Ula Partners as a Solution for Small Retailers
In order to support small retailers, Ula presents a solution through its Ula partners. Ula provides several product choices through e-commerce applications, as well as doorstep delivery services that make managing stock goods more efficient, allowing small retailers to use their capital for other needs.
“The company has transformed the entire retail value chain with a retailer-first approach, empowering small retailers by offering a wide selection of products at competitive prices and doorstep delivery services,” said Quona Capital Managing Partner, Ganesh Rengaswamy.
Quona Capital Managing Partner Ganesh Rengaswamy said they no longer need to close shops to go to busy markets and have to queue long, but can order daily stock needs through the Ula application.
As a result, many of Ula’s partners have experienced a daily profit increase of 15% resulting from their longer store opening times, reduced likelihood of inventory running out, and competitive stock purchase prices.
“Ula has transformed the entire retail value chain with a retailer-first approach, empowering small retailers by offering a wide selection of products, at competitive prices and doorstep delivery services,” said Ganesh.
The Company Focuses on Products for the Daily Needs of Consumers
Ula is currently focusing on consumer “daily needs” products, items included in FMCG and basic necessities, such as rice. The support of these shops is very important during the pandemic period especially because their income is uncertain.
The impact made by Ula can be seen in various aspects, including direct delivery services to stores that reduce the need for retailers to go to busy local markets to find stock of goods. The shop owner’s income is also protected because they can continue to look after their shop.
Besides, they are able to order smaller quantities of goods more often, enabling them to better manage cash flow, serving customers who order 6-7 times a month on average.