Indonesian micro-retail tech startup raises fresh funds

January 22, 2019 12:46
Warung Pintar aims to transform traditional small shops in Indonesia into prefabricated, tech-integrated kiosks featuring tech appliances, POS system and other smart facilities. Photo: Reuters

Warung Pintar, an Indonesia-based startup focusing on micro-retail technology, has completed a Series B funding round worth US$27.5 million as it seeks to help more street vendor shops digitize their businesses.

The fresh capital comes from existing backers SMDV, Vertex, Pavilion Capital, LINE Ventures, and EV Growth, and also a new investor OVO, a payment firm owned by Indonesian conglomerate Lippo.

With a mission to enable digitalization for the grassroots population in Indonesia, Warung Pintar provides tech appliances, including digital point-of-sale (POS) system, a surveillance camera system, free Wi-Fi, power bank chargers, LCD screens, a refrigerator, among other things, to street vendors, helping them engage with the local community.

According to TechCrunch, the startup, which was founded by early-stage investor East Ventures in October 2017, has roped in more than 1,150 traditional kiosks in Jakarta for digitalization.

The company aims to expand its reach to 5,000 kiosks before the end of 2019, having entered the Banyuwangi market in East Java last December.

In a press statement, Warung Pintar claimed that it has increased the income of its partner kiosk owners by 41 percent.

Through digitalization, the traditional mom-and-pop shops can become more competitive amid the changing retail landscape, co-founder and chief executive Agung Bezharie Hadinegoro said. 

For now, Warung Pintar charges US$5,000 from its vendor clients. The fee covers the cost of a new prefabricated, colorfully-painted kiosk; the tech appliances are provided without fee.

The startup has teamed up with Indonesian unicorn Go-Jek’s mobile payments platform, Go-Pay, to enable payments on its kiosks.

On the monetization plan for its smart kiosks, Hadinegoro hinted that its network of kiosks can appeal to brands and businesses when it reaches a wider scale.

“There are going to be a lot of ways to charge and make money,” Willson Cuaca, East Ventures co-founder and managing partner, also the president of Warung Pintar, told TechCrunch in an interview.

"Once we have built enough, we can manage the supply chain and then figure out of how to make money.”

Warung Pintar's new investor OVO said the retail tech startup's "proposition resonates with OVO's focus to empower Indonesian SMEs and enable micro-entrepreneurs as a critical part of financial inclusion.”

“This venture underlines OVO's conviction to be part of Indonesian SME growth in the digital economy era, OVO chief executive Jason Thompson said in a press statement.

Bukalapak, one of Indonesia’s largest e-commerce services, started to partner with local street stall traders last year, signing up over 300,000 kiosk owners as its points of sale.

Slightly different from Warung Pintar, Bukalapak’s initiative focuses on catering to local merchants, those who sell products via road-side kiosks, according to TechCrunch.

Another Indonesian e-commerce unicorn Tokopedia, which is also backed by East Ventures, launched a partnership program, named Mitra Tokopedia, to invest in small kiosks across the nation.

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