Gojek Tokopedia Merger Will Positively Impact Consumer and Industry

Major news, the thing everybody was talking about in the first week of 2021, is the seemingly imminent merger of Gojek and Tokopedia, Indonesia’s two most valuable tech startups. Unlike the weakly rumor of a merger with Grab, the discussion I’ve had in different channels about the potential integration between Gojek and Tokopedia is super exciting from a lot of different angles. Here’s my analysis of how the merger can impact.

Consumer Impact

From a consumer point of view, this marriage of complementary products will be tremendously magical. Transportation infrastructure, e-commerce, and finance all under one integrated product? That’s every consumer’s dream, hyperlocal commerce! Today, we have same-day delivery which works most of the time. The integration between Gojek and Tokopedia can produce something even better, Amazon Prime-style instant same-hour delivery, helping push e-commerce transaction and customer satisfaction even more while increasing driver utilization rate making it more economical as a business.

Gojek has basically done this hyperlocal commerce model through their GoFood platform, where customers can get the food they order in an instant, sometimes less than 30 mins. The integration with Tokopedia will connect this logistical infrastructure with Tokopedia’s merchants, which is a major advantage for Tokopedia amidst the neck on neck competition with SEA’s Shopee.

And that brings us to another market that practically all the unicorns have been focusing on: the SME industry. Both Gojek and Tokopedia has a big user base of SMEs under their platform, albeit with a different type of needs. Minimum overlap, mostly complimentary. Gojek is a time-sensitive service-based SME (restaurants, stores, warungs) and Tokopedia is more like a craft, product-based SME. Both unicorns have also been doing a major effort in SME digitalization through Point-of-Sales, merchant marketing apps, even providing growth capital.

Aside from their core businesses, both unicorns also ventured around the financial technology (fintech) space. Tokopedia with its strategic investment in Ovo, which is well embedded and is the default payment method in its marketplace, and Gojek with its GoPay and GoPay Paylater platform. Both also have been facing major competition by ShopeePay, one of the fastest-growing fintech products in the market especially during the pandemic where Shopee further pushed ShopeePay customer acquisition like a bushfire using a seemingly endless marketing budget.

Industry Impact

Combined, the two companies are valued at around $18 billion. And it’s no secret that IPO is one of the major reason behind this merger, investors in both companies need liquidity and returns, and it won’t hurt both companies to get some capital during these uncertain time. The combined company will most likely look at dual-listing if they choose to go public this year, BEI and maybe Nasdaq (possibly the friendliest market for tech IPOs this year).

The IPO will impact both the global and Indonesian markets. Both Gojek and Tokopedia are amazing companies but combined, it makes a very large and unique. As Bloomberg puts it, “a local mashup of Uber, PayPal, Amazon.com, and DoorDash.” and they couldn’t be more right. Although this can be exciting for some investors, it’s a unique new and unfamiliar territory for some, and there’s going to be a learning curve in understanding its business and fundamentals in full perspective. Nevertheless, the IPO will put Indonesia on the map the same way Yahoo! acquired made-in-Indonesia social media app, Koprol back in 2010 an event that sparked the startup growth.

For Indonesia itself, or more specifically investors who have been investing in Indonesia’s tech startups, this IPO is a bright light at the end of their tunnel. The possibility of a major tech IPO exists but more importantly, the combined unicorn will instantly become a major destination for startups to aim for acquisition, like what Apple and Google are to Silicon Valley.

Of course, I’m assuming that the combined company will actively acquire Indonesian startups which the industry will rely on. This can also kick start the employees-to-founders and founders-to-investors cycle this country desperately needs.

Although a lot of cause for excitement, the merger also has some points for concern. Consumer data privacy is one of the big ones. The combined product is the next frontier of consumer profiling, too. It will know where you are, where you’re going, what you buy, and essentially your financial profile. And that’s just the surface. Future integration will bring out more data from consumers that will become very valuable for combined companies. For a quick glimpse of the future, look at Amazon.

Consolidation is never easy, restructuring, cost reductions, optimizations, etc. But if done right, the result can be magical. And there are amazing possibilities lie ahead for the Gojek and Tokopedia post-merger, both exciting and frightening. But if I’m honest, I’m feeling excited more than anything else.

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Image from DepositPhotos.com

Bibit Secures 418 Billion Rupiah Funding Led by Sequoia Capital India

The online mutual fund platform Bibit announced further funding of $ 30 million or the equivalent of more than 418 billion Rupiah led by Sequoia Capital India. East Ventures, EV Growth, and 500 Startups participated in this round.

In the official statement, fresh funds will be used to develop services to encourage more novice investors in Indonesia.

Bibit’s President Director, Sigit Kouwagam mentioned that user growth has increased significantly to over one million new participants during the past year. “This is due to the increased awareness and education are given to novice investors to save every month consistently and the importance of having good personal financial management principles,” he said, Tuesday (1/5).

Based on IDX and KSEI data, the number of retail investors in Indonesia grew 56% YOY last year. This was partly because of the number of millennials with a growth of 92% new investors, from 21-40 years old. Although it has increased significantly, the participation of the Indonesian people in the capital market is still less than 2% at this time.

“We believe that all people deserve a better future. It helps to increase financial inclusion and driving investment practice in the right way is one way to do this. We are very proud to have Sequoia Capital India’s support to pursue this mission.”

On the same occasion, Sequoia Capital India’s VP, Rohit Agarwal also said, “Globally, we see consumers starting to shift their savings from low-yield products, such as gold and property, to financial products with higher yields. In Indonesia, we see Bibit as a trusted investment platform that can help millions of Indonesians invest optimally.”

East Ventures’ Co-Founder and Managing Partner, Willson Cuaca added, “Stockbit and Bibit have shown very high growth in the retail investor segment where transaction value growth will increase more than 10 times in 2020. We believe this funding will boost Stockbit’s growth and strengthen. their position as a leading investment platform.”

In addition, Stockbit released Bibit in January 2019, through the acquisition of a majority stake in Bibit with an undisclosed value. Stockbit alone was originally started as an investment community platform to exchange ideas and stock news in real-time.

As part of the Stockbit Group, Bibit is the company’s channel to reach novice investors with easy investments. Bibit utilizes Robo Advisor technology that adjusts products according to the user’s risk profile and investment goals. It is claimed that 90% of Seed users come from millennials.

According to the survey results summarized in the 2020 Fintech Report, currently there are several investment applications targeting consumers. Seeds themselves are the investment application that gets the highest total awareness from survey respondents.

In terms of mutual funds, Bibit is currently in competition with other players, including Bareksa, Ajaib, and Bukalapak which will soon launch a subsidiary focused on investment products.

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Original article is in Indonesian, translated by Kristin Siagian

Zenius Announces Pre Series B Funding; Revenue Boost Supported by “Live Class”

Zenius edtech startup today (05/1) announced the pre-series B funding round with an undisclosed amount. Alpha JWC Ventures and Openspace Ventures joined the list of new investors, participated also in this round the previous investors, Northstar, Kinesys, and BeeNext.

The fund is to be focused on platform development, amidst increasing market demand. Previously, Zenius has announced series A funding worth $20 million in February 2020.

In addition, the online learning platform claimed strong growth throughout 2020. In fact, per second semester last year, income has increased by 70% compared to the same period in 2019. Zenius provided loads of free learning content during the first half of 2020, to support the learning from home initiative in the midst of the Covid-19 pandemic.

In June 2020, along with rebranding and app updates, Zenius started adopting a freemium business model. Nearly 50% of Zenius’ revenue comes from the Live Class feature. Since its launch in March 2020, user growth is said to increase by 10 times with a retention rate of 90%.

Currently, Zenius receive an average rating of 4.9 (out of 5) for its classes, with attendance reaching 400 students, and breaking records with 10,000 users in one 60-minute math session.

Based on SimilarWeb data, the Zenius.net site gets an average of 3-4 million visits every month. On the Android platform, the application has been downloaded by more than one million users.

“Recently, we launched the Automated Doubt-Solving feature through our application and WhatsApp. This feature will provide a solution to students using only the camera on their cell phone. The system will then recommend a video and practice questions to explain the process behind the solution and allow students to actively apply it in a given set of practice questions. This will create a more immersive learning experience that contributes to students’ critical thinking and the ability to solve difficult problems and future concepts,” Zenius’ CEO Rohan Monga said.

“For more than a decade, they have made a track record of demonstrating successful learning outcomes and reinventing their core business as new mediums emerge. We believe this track record will be a key differentiating factor in the rapidly evolving education landscape, and we expect that the new funding round will drive Zenius’ growth even further,” Openspace Ventures’ Director Ian Sikora said.

Edtech in Indonesia

According to data summarized in the Edtech Report 2020 by DSResearch, there are currently some fast-growing education startup business models in Southeast Asia. Zenius alone is in the “Learner Support, Tutoring, & Test Preparation” category with several other players – including those from/already operating in Indonesia such as Ruangguru, Pahamify, and CoLearn.

Since 2012, various types of edtech services have slowly but surely continued to emerge in Indonesia. Referring to the report above, there are dozens of local edtech startups that still running – in fact, each held a different value proposition. The market share is quite substantial, as for players like Zenius or Ruangguru that focused on K-12 students (elementary-high school level), there are more than 50 million students each year throughout Indonesia.

This opportunity has made several foreign players lining up to enter the Indonesian market. As of 2020, at least 6 foreign players have succeeded in planting a business in Indonesia – including having representative offices and local teams.

The local edtech market continues to grow, not only serving students, various edtech startups are starting to target professionals and business customers. Recently, there as been some new models, one of which is related to fintech which focuses on education loans.

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Original article is in Indonesian, translated by Kristin Siagian

Application Information Will Show Up Here

Irzan Raditya on the Future of Tech: AI Has The Ability to Humanize Technology

Humans are complicated creatures, to say a machine can replace one is obviously not a simple matter. Irzan Raditya is fully aware of this fact, yet he still believes in the power of technology can make a better human ecosystem. He, through Kata.ai, allows technology to interact with people in a human-like way, with conversational AI (Artificial Intelligence).

Early ventures

As one of the privileged kids who have access to technology in early childhood, Raditya did not take it for granted. His father held an important role in the development of his interest in tech matters. Having a crush on drawing since elementary school, Paint was his first gateway to the computer. Around the same age, he gains the conviction to learn about IT and to become a programmer someday.

His flair for business has seen since 6th grade. Being obsessed with video games has sharpened his creative mind. Using all the tools and tech knowledge at home, he was able to collect money from creating some popular game mod for his friends. By the time he was introduced to internet broadband, sometimes around late junior and early high school, he can afford his passion for music by selling game [ragnarok] bot. Everything he did is self-taught, thanks to the internet.

The pursuit of a career in IT began when he entered Hochschule für Technik und Wirtschaft Berlin to get his bachelor’s degree in Computer Science. The year was 2009, German’s tech company was not as blooming as in the US. Raditya loves drawing, but when it comes to career and business, he decided to major in the mobile app instead of graphic design.

He made the most of his time in Germany by exploring valuable experience, he became an intern Engineer at Zalando (a subsidiary of Rocket Internet). This is where he learned that programming wasn’t his best talent, but he kinda has the ability to see things from a different perspective. He discovered lots of questions without certain answers and finally intrigued with role/skill on product management, as you work not only from the technical view but also the business and design part.

While busy studying, he managed to start a small project called Amplitweet, for musicians can have their music downloaded by users who tweet and follow. In the first attempt, Raditya gets that being the sole founder requires extra work, he then quit and focused on the study. However, there’s always this itch to keep doing something in his leisure time. Another idea comes to mind, a clothing line for geeks featuring illustrator from Indonesia called Cape&Fly. The plan was perfect but the execution flopped. Bad timing and lack of opportunity had to come in the way. Moving on to the next venture. Around 2012, Instagram started to boom but not a single platform provides people to have feeds for fashion and shopping. Styyli can be the answer, but they met the wrong partner and the product was a mess. Another failed story.

Anyway, there is always a pearl of wisdom behind every failure. At that time, he was the Head of Mobile Product in mobile food delivery in Jerman, in charge of 11 multiple business line countries with around 10 people reporting to him every day. His boss was quite the role model, young and ambitious, and he got motivated. Raditya’s last try in Germany was Rumah Diaspora, a platform that connects people from the same origin country who wants to live together. That time, it worked, it was launched.

From the journey, Raditya learned three things, (1) You cannot do it alone. He was working with Reynir [currently Kata.ai’s CMO] and learn many things together through Styyli. Also, he found dedication and good work ethic in Wahyu Wrehasnaya [currently Kata.ai’s COO] while trying to make things worked with Rumah Diaspora (2) Solve the problem in the right proximity, this is the reason he created Rumah Diaspora in Germany. (3) Start with what you have, one of the reasons for Styyli’s failure is because the fashion brand usually used by iOS users, while Raditya has a background in Android. In other words, It’s not a match.

Building a tech company

In 2015, Raditya decided to come home to Indonesia and exercised his passion to build his own business. He also heard that Indonesia is a country with lots of problems, it’s a paradise for entrepreneurs. Meanwhile, there are not as many problems in Europe. As an entrepreneur, it’s not as sexy as in Indonesia.

At first, he studied the market in Indonesia. Inspired by a company in the US that provides virtual assistants, combined with the culture of Indonesian people that is chat-based and craving for anything practical. Eventually, he decided to create YesBoss – a company that offers virtual assistant services with two Co-founders from his previous companies, Reynir [Styyli] and Wahyu [Rumah Diaspora].

“I believe to building a strong co-founding team, there must be trust and commitment as the basic foundation, other things can be learned and will follow. That’s why I’ve been thankful to be able to stick with my Co-Founders.” Irzan said.

YessBoss finally gained exposure and have VCs lining up with term sheet. One of US’ VC for late-stage even does the favor to connect them with 500 startups’ Managing Partner. Since the first day, our team aware that this technology is not quite automatic. This will never be scalable without having the capability in machine learning and NLP, which is the AI part. We requested Jim Geovedi to be the tech advisor for the NLP algorithm. The company managed to raise funding and within a year and a half has expanded to the Philippines [by acquiring a similar company, HeyKuya] with 100 employees in total.

However, things didn’t go as smoothly as planned. Here comes the dark episode, time passed and the company still can’t find a sustainable business model.

“It was very hard to scale if you tried to be everything for everyone. On the other side, we have an obligation to investors and to survive. As a result of changing business models, we have to lay off 90% of our employees. It was devastating,” Raditya said.

The rest of the team worked hard to figure out the solution, and the future is AI. In late 2016, the company officially pivots into a B2B business that offers conversational AI technology for corporations named Kata.ai. The first time they were approached by LINE and Unilever for a chatbot. They start with 10 people at that time, and they’re back to 100 people. Currently, the company has reached business growth 3 times a year and still counting.

The remarkable works of AI

Raditya said that he came across AI by accident. He used to do part-time jobs in Germany, one of which is becoming a call center agent. He was working around 4-6 months for an outsourcing company in England to receive complaints and inquiries. He thought this is just repetitive work and people are suffering from the shouting and pressure. Kata.ai can be the best solution for this kind of problem.

He also mentioned, “AI is actually a tool, it’s not a magic wand. There is always a side that sees AI as a threat, another side is quite extreme, considering AI as a savior. I’m somewhere in between, and it goes back to us, to people. With every kind of technology in our hand, if we can’t make it useful, it’ll just go up in smoke.”

AI will be the biggest thing just like the internet and electricity in the next 5-10 years. Every day, we interact with AI-powered apps. Google speech to text, youtube recommendation, and what Kata.ai’s been doing with conversational AI through the chatbot. Every product/company that didn’t use AI will soon be left behind. Many problems out there can be solved through AI, especially in Indonesia. The thing is, we are yet to explore and expose further on this. AI in healthcare, AI through education, AI featuring the government, AI for the smart city. AI has the ability to humanize technology and make it more seamless.

From the remarkable works of AI, it’s necessary to know the worst scenario of this thing that can affect the human world. First, when Indonesia far left in the adoption of AI technology, therefore, the opportunity goes to other players and they ended up leading the market. Second, we’re talking about AI to cost some job losses. People have compassion, they always find ways and look for opportunities. In the age of disruption, different kinds of new jobs are founded. There wouldn’t be any job lost but there will be a shift of task. Using conversational AI, the task can be quite high-touch works. People tend to forget and thought that AI can learn by itself. Meanwhile, there is a lot of work and the need for human labor behind AI’s remarkable work.

The work of Artificial intelligence has been captured and channeled through some medium. For example, there are many films highlighting the remarkable works of AI, some of those are giving a vision that AI can be so powerful, it can outgrow the human as its brain. Raditya tried to explain from the AI experts’ view on this matter, Kai Fu Li and Andrew Ng. He said the artificial intelligence used in some of the movies that can outgrow the human capacity is called AGI (Artificial General Intelligence). However, from the present status quo towards the utopist vision, we still digest away. The current deep learning is yet to be sufficient, it performs good curation but still focuses only on a specific task. With exponential growth, it still lacks the cognitive capability.

Aside from conversational AI and AGI, this technology has quite a large branch of science. Neurotechnology, for example, is another discipline that Raditya quite has an interest in. It is the kind of process where machines can read people’s minds. The research is still ongoing, but the idea is breathtaking and frightening at the same time.

Behind VC’s Investment on Local Cosmetics and Beauty Tech Startups

The rise of the beauty and personal care industry in Indonesia was marked by the birth of many new local brands. The government recorded 797 large to small and medium industry (IKM) cosmetic business players in Indonesia in 2019, of which 294 were registered with the Investment Coordinating Board (BKPM). This number is increased from the previous year which was 760.

Quoting Tempo, Social Bella’s CEO, John Marco Rasjid said he was optimistic about the rapid growth of the Indonesian beauty industry market. There are some factors behind the act. First, citing the Euromonitor report, the Indonesian beauty and personal care market is estimated to reach $6.03 billion in 2019 and increase to $8.46 billion in 2022.

Second, as John stated, the total average expenditure for beauty products for Indonesian consumers is around $20 per capita. The number is smaller than Thailand ($56 per capita) and Malaysia ($75 per capita). Third, Indonesia has a very large female population. Bappenas estimates that the total female population will increase to 142 million from the population in 2010 of 118.66 million.

Base’s Co-founder and CEO, Yaumi Fauziah Sugiharta said to DailySocial that this revival will mark the third wave of startup industry phenomena after the explosion of pioneering verticals, including e-commerce, ride-hailing, and fintech. This trend will be driven by local brands using the Direct-to-Consumer (DTC) approach.

“The technology ecosystem in Asia is getting mature and digital literacy is increasing. We can see that during 2018-2020 the market trend which begun to shift. Startups with higher popularity are consumer-centric and B2B models that help consumer-oriented businesses. In this country, beauty tech is predicted to be part of the revival of the third wave of startups,” Yaumi said.

Is it necessary for cosmetics and skincare business to look for funding from VC?

The emerging era of e-commerce or marketplaces such as Sociolla, Tokopedia, and Shopee contributed greatly to the birth of local beauty brands with the DTC model. With the increasing trend of online shopping, these business people actually benefit because they don’t need to build distribution channels, let alone build retail stores to reach consumers.

Instead, these local brands can allocate their funds for other purposes, such as R&D development, marketing channels, and technology. The thing is, in the last two years, some of the local brands have started looking for external funding to support and strengthen their business in the beauty tech industry.

From our observation, there are four beauty and wellness startups in Indonesia that have successfully obtained venture capital (VC) funding. Those are including Base, Nusantics, SYCA, and Callista. Although targeting different target markets, those three are using technology to develop products and identify consumer needs.

Brand/Startup	Category	Investor(s)	Stage
Base	Skincare and wellness	Antler Skystar Capital and East Ventures	Pre-Seed Seed
Nusantics	Biotech	East Ventures	Seed
SYCA	Cosmetics	Salt Ventures	Pre-Seed
Callista	Skincare	SKALA	Pre-Seed

Source: Revised by DailySocial

Yaumi revealed that his team had received pre-seed funding from Antler in March 2019 and received mentoring for 6 months. Antler is considered to be Base’s initial touchbase for VC before finally securing Seed funding from East Ventures and Skystar Capital.

“We want to bring the best experience and we want to challenge the current norm. Therefore, we need infrastructure to be able to build the project ten times better. At that time, we saw that our financing was not sufficient for capital. It’s also impossible from family, let alone a bank. Our only options are angel investors or VCs,” he said.

The kind of infrastructure referred to is the development of technology to understand consumer needs. Base provides skin profiling services with AI algorithms through the website. This explains why Base is not quite interested in marketing its products through the marketplace.

Because there is quite a journey from pre-purchase to post-purchase, this situation requires Base to rely on only one platform from an algorithmic point of view. The goal is none other than to determine the right skincare ingredients for consumers. This applies to business players using the DTC business model.

In addition, technology has largely helpful for its products to remain relevant to consumers in the next ten years. Therefore, it is important for them to focus on iterations, considering that generation Z tends to be digital savvy and does not want to be dictated to buy products.

“In this industry that relies heavily on product development, we are supposed to make VC believe that the product has been tested on the market. Not to mention the testing formula, with a note that it is constantly iterating. Startups are demanded to be agile. If we wait [funding] until it reaches consumers and monetization, it’ll be too late. In contrast to other verticals that may not have a manufacturing process. That’s why we have bootstrapped since the beginning,” he explained.

Meanwhile, the local startup brand Mad for Makeup admitted that it was not really seeking funding from VC. Two Mad for Makeup’s Founders, dr. Shirley Oslan and Tony Tan revealed that their current capital is still sufficient and they are still focused on pursuing growth in 2021.

With the achievement of business growth this year, Shirley admits that she has been approached by some large VCs. However, she prefers to involve VC as an advisor to prepare for a larger scale, even with zero capital for equity.

“For capital, there are no specific criteria as long as it’s the right strategy. However, for certain markets, we certainly need sources and further capital. We might consider next year [external funding], if we see plans to expand overseas,” he added.

Currently, Mad for Makeup claims to have succeeded in obtaining a good market-fit in the Indonesian beauty and cosmetics market with the DTC approach and affordable prices. With an initial capital of IDR800 thousand, this startup which jargon is rebel beauty has sold 26,000 units of products in its first year.

Indonesia’s beauty tech for VC

Outside Indonesia, the trend of VC investment in skincare and cosmetics businesses is not so brand new. In South Korea, this business has become an easy target for investors. They succeeded in showing their innovation and unique concept in reaching the younger generation who are digital natives. This country has successfully transformed into a mecca for the world’s beauty industry.

For example, South Korean startup Reziena developing an AI-based platform to generate data that can be used to create personalized home care services. Similar to this, Singapore-based startup Yours also strives to bring personalized skincare to its consumers.

Brand/Startup	Category	Investor(s)	Stage	Origin
Yours	Skincare	Surge, Global Founders Capital, Kindred Ventures, angel investors	Seed	Singapore
LYCL Inc (Unpa.)	Skincare and cosmetics	Venture Round	Series A	South Korea
Typology	Skincare and cosmetics	Firstminute Capital, Alven, Xavier Niel, Mark Simoncini	Seed	French
Tula	Skincare	Landis Capital, Great Oaks Venture Capital, L Catterton	Series Unknown	United States
True Botanicals	Skincare	Unilever Ventures, Kaktus Capital, etc	Series A	United States

Source: Several references / Revised by DailySocial

On a separate occasion, MDI Ventures’ Head of Investor Relations & Capital Raising, Kenneth Li said, there are some reasons why beauty startups are attractive to VCs. First, local brands today are using the DTC model to target the digital native segment.

Second, consumers of beauty products tend to have high user stickiness and repeat purchases. This means that this business can quickly reach for business growth. Indeed, getting into this vertical can be a business differentiation for VC. However, investment still requires scalability.

“If investing in technology, scalability can be much faster. They can also [invest] in R&D to create superior products. For example, in South Korea, this is one of their signature businesses. Eventually, the beauty industry is growing rapidly thanks to investment from VC/investors,” Kenneth said.

In addition, he added, scalability strategy can be done by using AI technology to obtain user journeys and user profiling. From the generated data, local brands can actually develop the right marketing channels and create products according to consumer needs.

Meanwhile, Kolibra Capital’s Senior Investment Analyst, William Auwines highlighted another perspective. Many local beauty brands have developed different marketing strategies to build their brand equity. In addition, what is quite striking is that beauty products have low production costs, therefore, it’s easier to decide product purchasing and the business will naturally require constant repurchasing.

He also said that the presence of e-commerce such as Tokopedia, Shopee, and Lazada is a game-changer for this industry because they are able to provide the consumer purchasing journey. As a result, not only are the beauty industry players increasing, but also their supporting businesses, such as sales, marketing, and logistics for the SME segment. Related to this, the beauty industry has become an attractive vertical for VCs as it has managed to show impressive growth in recent years.

“In terms of VC, we usually ignore traditional companies, such as fashion and retail. For us, there are many new technology companies that are growing exponentially by keeping low cost, reaching the market through online marketing, and improving their logistics services for profit. This factor makes the valuation possible. much higher than traditional companies,” he told DailySocial.

Female Daily Network’s Founder and CEO, Hanifa Ambadar said that these local brands could actually survive without the help of VC investment. The beauty business model directly targets end-users, therefore, they can immediately sell and get return capital. The margin from the business is also considered large enough for using a discount strategy to boost sales.

“However, they may scale up not as fast as other brands with large capital. Moreover, if they want to expand by building retail stores. Not to mention the campaign and product endorsements, this strategy will certainly require more capital,” Hanifa said to DailySocial.

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Original article is in Indonesian, translated by Kristin Siagian

Exploring Monetizing Opportunities in E-commerce Companies

E-commerce companies considered tend to burn money for the highest GMV as a metric. Above all, in principle, companies of any kind is required to make a profit. This is where the business development team took part to look for profitable business opportunities.

Regarding this topic, #SelasaStartup invited Blibli Histeria’s Vice President of Business Development & Project Lead, Cindy Kalensang as the speaker. Cindy is to discuss further on various business development tasks, their relation to finding business opportunities for e-commerce services, and how they are implemented in Blibli.

VP Of BizDev Blibli Cindy R Kalensang / Blibli — Blibli’S VP Of BizDev Cindy R Kalensang / Blibli

Generating business model

Cindy explained the basic task of business development is to develop a business for better growth, by exploring new business partnerships and so on. Therefore, he worked with various teams from Blibli’s other divisions for coordination.

In developing new business models, the business development team identifies underserved consumer needs in order to provide the right solution, called product market fit. “Product market fit is the one that needs to be iterated because consumers are looking for value, not only originality.”

Blibli started operating in 2011 using the B2C business model, as they wanted to guarantee the authenticity of goods to consumers. Therefore, Blibli collaborates with lots of brand partners. In this business, Blibli is taking a commission as a way of monetization.

The company has warehouses located at some spots throughout Indonesia to support its business model, especially to speed up delivery to consumers. Over time, the situation has changed, as a result, Blibli has developed other business models for B2B2C.

“Therefore, the process is to buy goods in large quantities, then store them and distribute them to our warehouse. Then, for B2B2C, revenue comes from margins, while B2C is from commissions,” he explained.

From the current business model, the problem remains for all e-commerce companies, it’s the uneven distribution process. This is because the majority of producers and distributors are located in Java. Eventually, the decision is final to open a new business model, it is C2C which all parties can participate in solving the problem.

“We open C2C, it opens for sellers, but we still curate [the onboarding process] and don’t let them sell fake[not original] items.”

Implementing new business model

Cindy continued, the competition of e-commerce services in Indonesia has gotten supper tight. It is visible through the number of e-commerce companies that adopted the “burning money” strategy by advertising on television for the sake of new consumer acquisitions.

“Actually, we are not only here to sprint but stay for the marathon. Blibli stands to be sustainable. That’s why we must remain loyal to our unique value proposition. The money-burning promo is normal because we want to acquire consumers, the most important thing is that the ongoing delivery value that stated Blibli’s difference from other players.”

Blibli’s business model continues to develop, from pure B2C, now B2B2C and entering C2C. Cindy said, the company continues to be adaptive to the situation. Blibli is also trying a new business model that is a subscription.

This is already running for the BlibliMart grocery service. Cindy explained that the subscription model is quite attractive and considered the key to success for Spotify. Initially, in enjoying music, people were accustomed to buying cassettes or CDs in physical form. Then, Apple comes and offers digital purchases per song.

“Spotify sees that people are saturated with music. In the end, they are offered streaming songs for free, but there are advertisements. They share profit with advertisers. Then they innovate with the subscription model. This is the model we are currently exploring. Amazon is successful with this model, offering one year of free shipping. ”

Cindy thought the trial subscription model at BlibliMart is quite on-point because it will be easier for consumers to buy certain needs at a much cheaper price. “Instead of buying when it’s sold out, it’s better to arrange the purchase. Goods are sent every two weeks. That is our value proposition by making a budget, therefore, spending is more efficient,” she concluded.

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Original article is in Indonesian, translated by Kristin Siagian
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D2C “Group Retail” Company Hypefast Pours Investment to Bonnels

Hypefast, a direct-to-consumer (D2C) group retail company, announced an undisclosed amount of investment in Bonnels, an online brand that sells natural products for mothers and children.

The participation of Bonnels adds to the Hypefast portfolios. The Founder and CEO, Achmad Alkatiri said to DailySocial that the company currently has 12 portfolios and Bonnels is their first portfolio in the health and beauty sector. Achmad ensures to double their investment in this sector.

Even though he can’t breakdown in details, Achmad said Hypefast’s business is growing a team, ecosystem, and funds to help brands develop and expand quickly. Hypefast’s target brands are those with an annual profit of more than Rp500 million and online-based for its major business.

Hypefast was founded by people with long-time experience in the industry, especially Rocket Internet alumni. Apart from Achmad, who was once Lazada Indonesia’s CMO, the company advisors are Florian Holm (former CEO of Lazada Indonesia), Ioann Fainsilber (Co-Founder of Pintek), and Jakob Rost (Co-Founder and CEO of Ayoconnect).

In his release, Bonnels’ Brand Founder Denny Santoso said, “Along with Bonnels’ journey, we need partners with strong backgrounds, experience, and resources to support my mission of bringing Bonnels to be the biggest retail brand for natural products for babies, children, and mothers in Southeast Asia. Hypefast with all its resources and ecosystem is the best choice to drive the growth of Bonnels. I am very happy to be joining the Hypefast family.”

Bonnels, apart from selling on its own e-commerce platform, also has channels in a number of leading online marketplaces.

Denny himself is not a stranger in the startup industry and has been involved in this ecosystem from the beginning. Apart from Bonnels, he also developed the Tribelio platform to make it easier for companies to build and market community-based products.

Achmad added, “Hypefast and Bonnels have the same vision and mission, namely to build an ecosystem for local Indonesian brands, therefore, they can compete not only in Indonesia but also in various other countries. I see Bonnels has enough potential and the quality of its products can compete with brands from abroad.”

The growth of the D2C sector and the new economy will decorate the Indonesian startup industry this year. Starting from coffee brands, investment in this sector also includes health, beauty, and F&B products.

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Original article is in Indonesian, translated by Kristin Siagian

Farmaku Healthtech Acquires Information Portal DokterSehat

The healthtech startup Farmaku announced the acquisition of DokterSehat, which was held last November for an undisclosed amount. Post-acquisition, both platforms can still be accessed as per usual. DokterSehat’s CEO Indra Adam Darmawan is appointed as Farmaku’s CMO.

Farmaku is a platform that provides drug purchase services, while DokterSehat focuses on health information portals. Both have been operating for at least 4 years.

“Farmaku has previously collaborated with DokterSehat, therefore, this strategic merger is expected to provide more comprehensive health services to the Indonesian people,” Farmaku’s CEO Iswandi Simardjo said.

Indra added, “This acquisition is expected to complement the wider ecosystem in terms of transactional and providing health information in Indonesia.”

The healthtech sector is one of the sectors that experience massive acceleration due to pandemic. In Indonesia, there are two startups that have reached the centaur level (valuation above $100 million), Halodoc and Alodokter.

Apart from health information portals and drug delivery, startups in this segment have been moving towards developing smart clinics and biotech startups.

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Original article is in Indonesian, translated by Kristin Siagian

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Cakap Closes Series A+ Round Worth of 42,6 Billion Rupiah

Cakap, an edtech platform focused on language learning, today (22/12) announced the series A+ funding worth of $3 million or equivalent to 42.6 billion Rupiah. This round was led by the Heritas Venture Fund, participated also Strategic Year Holdings and some previous investors, including Investidea Ventures and Prasetia Dwidharma.

Fresh funds will be channeled to strengthening human resources, technology development and domestic expansion. Regarding Cakap, this pandemic is seen as a good momentum to introduce a more in-depth online education model. In the community, social restrictions and school activities from home encourage the adoption of learning technology at various levels of education.

Since the beginning of this year, Cakap is said to grow up to 10x. As of today, the application on the Google Play Store has been downloaded hundreds of thousands of times; Meanwhile, according to Similar Web data, Cakap.com visitors are to continue growing, from 550 thousand in June 2020 to 1.35 million in late November 2020.

However, the competition for edtech services for language learning is getting crowded. Apart from Cakap, there are several startups that offer similar services both from local and global players, such as Bahaso, LingoAce, Elsa Speak, Duolingo, etc.

Meanwhile, according to the Edtech Report 2020, the startup ecosystem in the education sector has formed progressively, the majority are filled with learning service providers with a variety of coverage.

Statistik lanskap layanan dari startup edtech di Indonesia / DSResearch — Edtech startups landscape statistic in Indonesia / DSResearch

“The key to success during this pandemic is understanding the Indonesian landscape to create accurate educational solutions with solving capability in the target market, where access to high quality education is not only required by students in big cities but also throughout the nation, including third-tier cities and remote areas,” Cakap’s Co-founder & CEO Tomy Yunus said.

He also said that Indonesia is one of the big education markets in Indonesia. There are at least more than 3 million teachers in 300 thousand schools. The number of students is fantastic, reaching over 60 million – over time, they also tend to become more tech-savvy and aware of the internet.

“We believe in the long-term potential of the education technology market in Indonesia, and we are very excited to support Cakap in its efforts to utilize and increase the demand for high quality education amidst the increasing disposable income of the general public,” Chairman of Strategic Year Conrad Tsang said.

In mid-July 2020, Cakap has expanded the learning scope through the UpSkill app. It is focused on content such as entrepreneurship, career development and self-development. They implement a module base and topic base systems, therefore, users can choose issues, topics, and packages according to their individual needs.

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Original article is in Indonesian, translated by Kristin Siagian

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Waresix Acquires Trukita, to Expand Business in “First-Mile” Logistics

Logistics startup Waresix today (17/12) announced its acquisition of Trukita; a startup that provides a marketplace portal to help users find freight and truck services for first-mile delivery. This is to expand the company’s coverage, as previously known, Waresix only focuses on mid-mile logistics services.

After the corporate action, Waresix plans to accommodate all aspects of the supply chain through a technology approach, including truck management, warehousing, multimodal transportation, and vendor management.

In September 2020, Waresix also announced the fundraising up to $100 million or the equivalent of 1.5 trillion Rupiah of follow-on funding. Some investors participated in the last Series B funding, including EV Growth, Jungle Venture, SoftBank Ventures Asia, EMTEK Group, Pavilion Capital, and Redbadge Pacific.

“The acquisition of Trukita is in line with a strategy to complement our capabilities in mid-mile logistics services. This strategy allows us to combine our expertise and company network to expand our service range, as well as offer a more comprehensive range of services to our customers,” Waresix’ Co-founder & CEO Andree Susanto said.

He said that the acquisition of Trukita will increase the company’s coverage access to more than 10 thousand trucks and hundreds of new customers, putting the company in the best position to seize more opportunities in the Indonesian port and sea logistics market to be valued up to $60 billion.

Meanwhile, Trukita’s Co-Founder & CEO Ady Bangun said, “Trukita can now share the advantage of Waresix’s technology, as well as warehouse and truck. This will improve our services to customers in a more holistic manner, and expand our service reach beyond first-mile logistics.”

Co-Founder & CEO Waresix Andree Susanto dan Co-Founder & CEO Trukita Ady Bangun / Waresix — Waresix’s Co-Founder & CEO Andree Susanto and Trukita’s Co-Founder & CEO Ady Bangun / Waresix

Gaining profit despite pandemic

In early December 2020, we 8 funding that had been successfully booked by local logistics startups. Of course this is a breath of fresh air for the industry, especially the logistics sector is worthy of consideration because it supports various other businesses, one of which is e-commerce which contributes up to $32 billion of GMV for Indonesia’s digital economy.

Logisly	Series A	$6,000,000	Monk’s Hill Ventures
Waresix	Series B	$75,000,000	EV Growth, Jungle Venture, SoftBank Ventures Asia, EMTEK Group, Pavilion Capital, Redbadge Pacific
Andalin	Seed Funding	$1,500,000	BEENEXT, Access Ventures, ATM Capital
Webtrace	Seed Funding		Corin Capital
Shipper	Series A	$20,000,000	Prosus Ventures, Lightspeed, Floodgate, Y Combinator, Insignia Ventures, AC Ventures
GudangAda	Series A	$25,400,000	Sequoia India, Alpha JWC Ventures, Wavemaker Partners
Kargo Technologies	Series A	$31,000,000	Tenaya Capital, Sequoia India, Intudo Ventures, Amatil X, Agaeti Convergence Ventures, Alter Global, Mirae Asset Venture Investment
Waresix	Series A	$25,500,000	EV Growth, Jungle Ventures

The logistics business ecosystem alone is quite complex, we previously published an analysis in 2019. Some business players such as Waresix eventually rests on more than one business model – apart from providing logistics transportation services, it also started to help business people manage warehouse to make it efficient for product distribution. Several other players have done the same thing.

For example, Shipper has done quite a movement, through its acquisition of Porter and Pakde, they expanded the scope of business in the realm of warehousing to facilitate online sellers in marketplaces and social commerce. SaaS players for omnichannel e-commerce such as Sirclo also have a similar scope of business now. This trend is a strong indication that every player in the ecosystem is trying to provide end-to-end services.

In Indonesia, spending on ground logistics is estimated to reach $290 billion by 2020. Apart from the large market, the number of commercial vehicle population (9.6 million units in 2019) has created intense price competition. However, the ratio of logistics costs to Indonesia’s GDP has reached 24%. It means that this market is still very promising in terms of size.

Various logistical initiatives are also being intensified. Most recently, Paxel in collaboration with Blue Bird presents PaxelBig. It is a same-day delivery service with a capacity of more than 5 kg aimed at MSME players using the fleet owned by Blue Bird. The unicorns also strengthen their business in this segment. One of them is Gojek, which will finalize intercity shipping services through the JX unit as a joint venture with JD.id.

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Original article is in Indonesian, translated by Kristin Siagian
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