Ula Startup Supported by Jeff Bezos Earns IDR 328.4 Billion
Business to business (B2B) e-commerce startup Ula received an additional US$ 23.1 million or around IDR 328.4 billion from Tiger Global. This is as part of an extended Series B funding round.
Co-founder of Flipkart, Binny Bansal also participated in the funding round. The total investment obtained from this round is US$ 110 million.
“The additional funding in our Series B round demonstrates continued investor interest and strong belief in Ula’s vision and mission,” said Ula Co-founder and CEO Nipun Mehra as quoted by KrAsia, Tuesday (16/11).
The new investment comes a month after Ula raised $87 million at the close of its first Series B round. The funding was led by Prosus Ventures, Tencent and B-Capital.
Bezos Expeditions, the investment firm owned by Amazon founder Jeff Bezos, also participated in the funding round. This marks the first time Bezos Expeditions has invested in a Southeast Asian company.
In addition, there are several investors in Southeast Asia who participate, namely AC Ventures, Gojek, Citius investors and Northstar Group. Past investors also participated in this funding round.
The e-commerce startup targeting the shop was also injected with capital by SMDV and Saison Capital. In addition, Ula hired the Commissioner of the Indonesia Stock Exchange (BEI) Pandu Sjahrir as an advisor to the company.
Will Use Funds to Expand Geographic Coverage
Ula will use the funds to expand geographic coverage. In addition, recruiting more workers and improving product capabilities, including expanding the ‘buy now, pay later’ or Buy-Now-Pay-Later (BNPL) offering.
“We’ll continue to take a customer first approach to addressing fundamental issues as we move forward,” said Nipun.
In total, Ula raised US$ 140.6 million since its establishment last year. This startup targets traditional warung owners, especially in tiers two to four cities. Bukalapak is also targeting this segment through Bukalapak Partners.
Ula claims the business grew 230 times. The company now offers more than six thousand products and attracts more than 70 thousand stalls. The company also has teams spread across three countries. Based on their website, there are three services available such as:
1. B2B marketplace: providing products at competitively claimed prices
2. Community-based sales program
3. Titik Ula: offers MSME players or anyone else to take advantage of their vacant space as a pick-up point for goods ordered by Ula customers and earn extra money. Ula uses stall transaction data and knowledge of the retail market to provide pay later service options, whose market value is predictable US$ 150 billion in Indonesia.
Reasons Why Ula Startups are Attractive to Investors
Indonesia is seen as a great opportunity for entrepreneurs and investors because it has large population and rapid economic growth.
Indonesia has so many stalls and small business that sell fast-moving consumer goods, such as packaged foods and drinks, as well as household goods.
They are an integral part of society, especially in small towns and provinces outside the capital Jakarta, accounting for nearly three-quarters (72%) of the country’s USD47 billion (Rp669 trillion) sales of consumer goods.
However, many people still rely on traditional ways to refill their supplies by closing their shops when they visit wholesalers to buy their stocks.
In October 2021, Ula closed its Series B round raising $87 million (IDR 1.2 trillion). Mehrasaid the cash would be used to expand existing market offerings, as well as launch a service called buy now, pay later to provide small loans to kiosk owners.
The CEO expects to double the number of merchants working with their company. They also hope to help merchants expand into new categories such as clothing and technology, with the ultimate goal of doubling their income.