Micro, small and medium enterprises (MSMEs) are the backbone of most developing economies. One of the most striking examples of it can be found in Indonesia, where over 57 million MSMEs operate in the region and account for over 97% of a total workforce of 140 million people. To put that into perspective, the total US workforce is around 160 million people.
Aside from their financial importance, micro-SMEs in the region have a more profound impact on their communities. Similar to Latino communities, they serve as a center of gravity for social activities, such as viewings of sports events, local festivities, etc.
Seeing as MSMEs and their customers don’t have access to financial services from traditional, established banks, merchants are forced to finance their own buy-now-pay-later solutions without any support. And while you might think that, with an internet penetration rate of around 70%, MSMEs in Indonesia would use tech to track these credits, you would be terribly mistaken! An overarching majority of mom and pop shops use so-called “Buku Kas” (Indonesian for cashbook) to record business transactions.
They offer a clear value proposition for merchants, replacing pen and paper cashbooks and enabling access to the world of financial services. Bukukas is working on putting an end to the archaic solutions used today by MSMEs and serving merchants with real-time profit visibility, credit reminders, management reports and much more!
The benefits for small businesses are clear:
While Bukukas has not been the only one to try and take advantage of this massive opportunity, they have been able to establish themselves as market leaders within just one year from launch, both in terms of scale and user engagement. This has been in large part due to the simplicity of the app and the team’s obsession to add new features and touchpoints with customers.
The vision of Bukukas on a macro-level, however, goes far beyond normal cashbook features. It intends to become the backbone of MSMEs finances, with functionalities around invoicing, payments, lending and savings, to name a few. And yet, this is still only the low-hanging fruit! The challenges are not limited to bookkeeping and credit sales. Data and relationships built through something as trivial as a cashbook can translate into the “tech-fin” powerhouse that truly brings micro-SMEs into the digital era.
And it’s not just Bukukas with the vision, customers seem to agree! As of December 2020, Bukukas has 1.8m MAUs and during that month, the platform also recorded $17.4 billion worth of transactions on an annualized basis, which is absolutely incredible if one keeps in mind that the company was founded one year ago.
When we first met the founders of the (back then) five-month-old startup, we immediately realized that Krishnan and Lorenzo are the ideal duo to execute this vision. They bring highly complementary capabilities and deep scaling expertise. Having met in Lazada Indonesia as coworkers across operations, merchandising and sales, they are no strangers to explosive growth.
When building a consumer-facing solution, we love to see entrepreneurs digging deep into the data their customers provide to them while using their apps. This is easier said than done. But when we met the team at Bukukas we were truly impressed by the systematic gathering of granular data, their intelligent interpretation of it, and their excellent execution when implementing changes.
Since investing, the team has managed to bring onboard rare talent that is building an outstanding product with unprecedented growth during unprecedented zoom-centered times. They are a remote-first team that is laying the foundations for a truly scalable, data-driven and customer-centric organization.
At Speedinvest, we are glad to continue supporting Bukukas and are delighted to welcome the Sequoia India team, who bring years of experience backing and supporting some of the most prominent SME solutions and Fintech companies in the region. We are more excited than ever to be supporting Krishnan, Lorenzo and the entire Bukukas team to make financial services accessible to Indonesian MSMEs.
Can’t wait for the journey ahead! 🚀
Authored by Enrique Martinez Hausmann, a member of the Speedinvest Fintech team. Traditional institutions have long been the sole gatekeepers of the financial sector. Now, Fintech companies are uprooting business models across insurance, investing, lending, real estate and banking, easing access to financial services we use every day. From wefox to Bitpanda, Luko, Curve and Tide, the Fintech team has a portfolio spanning from Europe to emerging markets and partner with the most innovative tech startups driving this disruption. Whether reinventing payments or embedded finance, our sector expertise, strong industry networks, and in-house operational support helps founders unleash their full potential.
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