Indonesian SME-focused fintech BukuWarung nets $60m to boost tech, products

BukuWarung, an Indonesian financial technology (fintech) startup that helps micro-SMEs in the country, announced raising $60 million in its Series A funding round.

The roudn was led by US-based venture capital firms Valar Ventures and Goodwater Capital. Valar is an early investor in global fintech unicorns Wise and N26 while Goodwater has invested in Coupang, Monzo, and Xendit.

In a statement, the fintech startup said it will use the fresh funding to enhance its technology and product capabilities across its core accounting, digital paymens, and commerce products.

BukuWarung is a Y-Combinator-backed fintech company that is building digital infrastructure for 60 million MSMEs in Indonesia, allowing these business owners to manage and grow their businesses efficiently starting with bookkeeping and payments.

The startup, founded by Chinmay Chauhan and Abhinay Peddisetty in late 2019, has so far served 6.5 million merchants across its bookkeeping, payments, and e-commerce solutions.

The funding marks the largest Series A round by a company in this sector and brings BukuWarung’s total funding to date to approximately $80 million.

“This investment will further help us build an operating system for MSMEs, creating a positive socio-economic impact across Indonesia as the country emerges from the COVID-19 pandemic,” said Peddisetty, co-founder and CEO of BukuWarung.

The startup is now focusing on enhancing the online payments capabilities of Indonesian MSMEs, given that merchants networked with the company are now selling their products and/or services online.

Since the introduction of its digital payment features last year, BukuWarung has processed around $1.4 billion annualized payments. It is on track to process over US$10 billion in annualized payments by 2022.

The company will also strengthen the digital payment infrastructure for MSMEs by offering a wide range of payment solutions that solve the needs of merchants as they go digital.

Commenting on the investment, Valar Ventures founding partner James Fitzgerlad said the entire team at BukuWarung are dedicated to helping merchants adapt to an online world of commerce and have established themselves as the clear market leader through relentless execution

BukuWarung is Valar’s first investment in Indonesia.

Other investors in the funding round include existing investors and notable angel investors such as former GoPay CEO Aldi Haryopratomo and Victor Jacobsson, founder of Europe’s most valuable startup, Klarna as well as partners from SoftBank and Trihill Capital.