East Ventures and Triputra Group Inject Practical Logistics Startup Capital
Venture capital companies, East Ventures, and Triputra Group inject practical startup capital. This start-up provider of data-based supply chain solutions for direct to consumer (DTC) brands plans to develop a team.
The fresh funds will also be used to improve technology and product offerings. However, Practical did not specify the amount of pre-series A funding that was achieved.
Practical Co-founder Adrian Gilrandy said the company focuses on targeting the DTC market in the fields of fashion, food, personal care, as well as furniture and household appliances in Indonesia. Its value is predicted to be US$ 36,120 billion per year by 2025.
“We see a promising DTC market in Indonesia. This is reflected in our monthly income which grew more than 12 times year on year (yoy) this year,” Adrian said in a press statement, Tuesday (12/14).
The compounded annual growth rate (CAGR) of revenue is estimated to be up to 24 times and 31 times, respectively. This is based on an eight-month period from January to September 2021.
“As a single point of contact, we enable DTC brands to focus more on core competencies, which in turn helps them achieve much higher incomes with efficient use of working capital,” he said.
Predicting Up to 6 Times Revenue Growth
Practically also estimates, revenue will grow up to six times in the near future. But he did not explain the reason for this increase. The startup offers services to brand owners in managing daily operational activities.
Practical Co-founder Dipta Imanto said, the Practical platform has full visibility of all supply chain processes. That way, production planning and inventory control processes are claimed to be more optimal and cost-effective. Brand owners can focus more on business development.
“Managing business operations from managing procurement, logistics to store management in addition to designing and marketing good products can be a big problem for the DTC SME brand. Here we are here by providing seamless operational management services,” said Dipta.
Services Offered by Practical
Practically has several services which you can see below:
1. Procurement and production activities, which allow brands to take advantage of proprietary supplier networks. Practical for creating and developing products.
2. Logistics and fulfillment services, which offer operational efficiencies through automated systems and reliable partners.
3. An order management system for brands to enter the right sales channel, based on accurate data and demand predictions.
4. Access to working capital financing that helps brand development.
Co-Founder and Managing Partner of East Ventures Willson Weather said, the reason the company invested in Practical was because they believed that their product offerings could help the DTC SME brand to grow and develop rapidly.
“Based on their performance so far, we can see that Practical products do indeed solve their customers’ main problems. We are excited about Practical’s developments as they continue to grow,” said Willson.
D2C is a business model that performs the sales process without the help of intermediaries. Simply put, a businessman that produces goods, packs them, and sends them directly to their consumers without any intervention of other parties or third parties.
These intermediaries vary, they can be the resellers, dropshippers, or retail stores such as minimarkets. Without the help of these intermediaries, business people can directly market their products to the networks they already have, such as websites, social media, to physical stores.
However, this business model has drawbacks because businesses have to manage their own supply lines, need long preparations, and have to face consumers directly.
This is where a role like Practical comes in, actually not only Practical who plays in this segment, there is also Sirclo which provides end-to-end e-commerce enabler solutions for brands with larger business scales.