Billionaire Amazon founder Jeff Bezos made his first funding in a Southeast Asian e-commerce start-up final month.
But it surely’s in not one of many area’s billion-dollar unicorns. It is in a mom-and-pop store start-up that is been round for lower than two years.
And its founders? A few of Bezos’ former staff.
“It was extremely lucky and an enormous fan boy second for me,” Ula CEO Nipun Mehra, 40, advised CNBC Make It.
Enterprise impressed by Bezos
Indonesian e-commerce start-up Ula is a wholesale market aiming to modernize the nation’s thousands and thousands of mom-and-pop kiosks, or warungs, by offering stock and supply companies in addition to financing.
Based in January 2020 by CEO Mehra, the corporate has thrived below a pandemic-induced shift to digital, to date elevating over $117 million in funding from massive names like Tencent and Lightspeed Enterprise Companions.
One amongst them is Bezos, whose household workplace Bezos Expeditions invested an undisclosed sum after one of many start-up’s early backers advised him about Ula.
The standard method of doing e-commerce would not work … So you need to discover different methods of doing it.
Nipun Mehra
co-founder and CEO, Ula
Although Mehra has by no means met the billionaire founder, he labored below him as a software program engineer at Amazon’s Seattle headquarters earlier than becoming a member of e-commerce big Flipkart in his native India.
Like Bezos, Mehra yearned to be an entrepreneur. But it surely wasn’t till years later, whereas working as an investor at Sequoia India, that he noticed a chance to adapt the standard e-commerce mannequin for a brand new market: small meals kiosks in Indonesia.
“The everyday Amazon, Flipkart — or right here in Southeast Asia now we have Shopee, Lazada, Tokopedia and so forth — has been extra on the non-food facet. Meals is a really totally different method of working issues,” mentioned Mehra.
“Often in rising economies, their earnings profile is such that they need to purchase incessantly and in small baskets. The second you get into that dynamic, the standard method of doing e-commerce would not work. You’ll be able to’t ship a three-, four-, five-dollar basket to anyone’s dwelling and do it profitably … so you need to discover different methods of doing it.”
Adapting e-commerce for Indonesia
Indonesia, with its huge inhabitants and fast-growing economic system, is seen as an enormous alternative for entrepreneurs and traders.
Central to which might be the nation’s thousands and thousands of neighborhood kiosks, which promote fast paced client items, like drinks and packaged meals, in addition to home goods.
They’re an integral a part of society, particularly within the smaller cities and provinces exterior the capital Jakarta, accounting for nearly three-quarters (72%) of the nation’s $47 billion client items gross sales.
But many nonetheless depend on conventional means of replenishing their provides by shuttering their shops once they go to wholesalers to top off wares.
They’re very restricted by the bodily footprint that they’ll entry.
Abheek Anand
managing director, Sequoia India
“They’re primarily run by one or two individuals, who act like shoppers. They personal the enterprise; they should procure issues for themselves to promote,” Abheek Anand, a managing director at Sequoia India, one in every of Ula’s traders, advised CNBC Make It.
“For them to faucet into offline provide chains is definitely very inefficient. They need to go to the native market, spend hours determining what to purchase, the place to purchase it from. By and huge, they’re very restricted by the bodily footprint that they’ll entry,” he added.
Drawing on Amazon experience
Mehra needed to simplify that course of by making a business-to-business platform that may allow stallholders to order inventory at aggressive charges and have it delivered to their retailer for a small charge.
So, he known as on his contacts within the e-commerce house to assist him notice the imaginative and prescient.
His former colleague from Amazon, Alan Wong, Riky Tenggara from Lazada, and Procter & Gamble govt Derry Sakti rounded out the founding workforce.
“We have discovered all these things in Amazon, we have discovered all these things at enterprise college. How will we carry a few of that into this little smartphone and assist them each make more cash in addition to save extra money?,” mentioned Mehra.
Powering up within the pandemic
The enterprise acquired off to a gentle begin. However inside months of launching in January 2020, the pandemic hit, making demand for companies like Ula extra pressing.
Lockdowns made it tougher for stallholders to supply items from wholesalers, at the same time as buyer demand for each day necessities grew. That precipitated many mom-and-pop retailers to pile onto the platform.
The necessity out there simply fully switched. In lockdown, your first precedence is to get your meals, is to get issues that you just devour.
Nipun Mehra
co-founder and CEO, Ula
“The necessity out there simply fully switched. In lockdown, your first precedence is to get your meals, is to get issues that you just devour,” mentioned Mehra.
The founders responded rapidly, onboarding tens of hundreds of stallholders and increasing their workforce of 15 to 400 throughout Indonesia, Singapore and India. That fast progress caught the attention of traders, serving to them to appeal to their first spherical of funding inside six months.
“Probably the most thrilling addition to the corporate is Jeff Bezos, who’s invested, which is clearly good validation for the enterprise. However there are a selection of different actually good individuals who have joined us alongside the best way,” mentioned Sequoia India’s Anand.
An formidable progress agenda
In October 2021, Ula closed its Collection B spherical, elevating $87 million. Mehra mentioned the money will go in direction of increasing its current market providing, in addition to launching a so-called purchase now, pay later service to supply stallholders with small loans.
Inside the subsequent 18 months, the CEO hopes to quadruple the variety of retailers Ula works with from 70,000 as we speak to 300,000. He additionally hopes to assist retailers increase into new classes akin to attire and know-how, with the final word purpose of doubling their earnings.
That’s what will result in a brand new type of retail. Not one thing which now we have seen within the U.S. … It will likely be an Indonesia-specific, distinctive answer.
Nipun Mehra
co-founder and CEO, Ula