There’s a new, high-stakes startup battle brewing in Southeast Asia.

Unicorns like Grab, GoTo, and Traveloka are preparing to reach public markets and grabbing all the headlines. But away from all the front-page buzz, tens of millions of dollars are pouring into young, unprofitable but ambitious startups looking to digitise millions of micro, small and medium enterprises (MSMEs) in Indonesia.

BukuWarung and BukuKas, both founded in 2019, are leading the charge. Their vision: to provide free digital bookkeeping and accounting tools for Indonesia’s MSMEs.

If that doesn’t sound like an exciting business on paper, get this: Indonesia has over 60 million MSMEs, all of which have been forced to digitise because of the pandemic. They account for 97% of Indonesia’s workforce and 60% of its GDP. BukuWarung and BukuKas see it as an opportunity to build the next major digital frontier in Southeast Asia.

As do investors, if their recent funding history is anything to go by. BukuWarung raised raised TechCrunch BukuWarung, a fintech for Indonesian MSMEs, scores $60M Series A led by Valar and Goodwater Read more a US$60 million funding round in June. Its investors include American firms Valar Ventures—a fund founded by PayPal co-founder Peter Thiel—and Silicon Valley-based Goodwater Capital. BukuWarung’s valuation hit US$250 million during this round, two existing investors said.

Just one month earlier, rival BukuKas announced announced TechCrunch BukuKas gets $50M from investors including DoorDash’s Gokul Rajaram and TransferWise founder Taavet Hinrikus Read more it had raised US$50 million in a Series B. The identity of the lead investor was not revealed, but an existing investor told The Ken it was led by Hedosophia, a London-based fund whose management includes billionaire and former Facebook executive Chamath Palihapitiya. BukuKas and BukuWarung had each raised US$10 million as recently as January.

Certainly, the early results are impressive. BukuWarung claims to have 6.5 million registered merchants, and BukuKas 6.3 million. Actual activity rates appear lower. BukuKas has an estimated 1.1 million monthly active users as of May, according to app analytics firm App Annie, with BukuWarung’s figure being around 659,000.

The furore around these two 18-month-old services isn’t unprecedented. Funding has rained down on India-based Khatabook, which pioneered the concept of offering free, basic accounting and management tools as trojan horses to offer more sophisticated services, typically around finance, to small business owners. (We’ve written written The Ken Khatabook’s free-now, monetise-later fundraising hack Read more about Khatabook in the past.)

The three-year-old company has raised US$87 million from investors like China’s Tencent and early Facebook backer DST Global.


Jon Russell

Jon Russell is Southeast Asia editor for The Ken based in Bangkok. Originally from the UK, Jon moved to Thailand in 2008. He’s passionate about telling thoughtful business stories, and tracking the impact of the internet in his adopted home of Southeast Asia.

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