Warung Pintar Raised US$4 Million Seed Round
12 February 2018
JAKARTA, February 12, 2018 — Earlier today, retail technology company Warung Pintar announced that it closed a round of $4 million seed funding from SMDV, Digital Garage, East Ventures, Insignia Ventures Partner, Triputra Group and various angel investors. With this new round of funding, Warung Pintar aims to develop a couple of hundreds of Warung Pintar in this year.
Warung Pintar itself is a prefabricated kiosk with technology integration for Indonesian mom and pop shop (or called “warung” in Bahasa Indonesia). Technology implementations for Warung Pintar come in three pillars: Internet of Things (IoT), big data analytics and blockchain. IoT implementation aims to improve the accuracy of retail data input. Big data analytics will be applied for better customer behavior understanding, and blockchain will help to create transparency and trust for warung proprietors.
The company started to operate end of last year as East Ventures’ second internal project, after successfully incubating the popular coworking space chain EVHive. The initiative is a continuation of East Ventures’ commitment to working on civic minded technology projects in the archipelago, a commitment which started via the formulation of its ‘Creating Shared Value’ unit in early 2016.
The idea of this venture came organically when East Ventures’ team observe local’s behavior. In Bahasa Indonesia, the word warung refers to a small, streetside retail shop which sells groceries, food, beverages, and other essentials for everyday living. In general, warungs play an important role in day today life for most locals.
Agung Bezharie, former Investment Associate of East Ventures which leads the company as a full-time CEO explained, “Micro SME has been the backbone of the country. Last year it contributed 60% of Indonesia PDB, and we see it will grow even more in the future. Warung as the form of the grassroots microenterprise has existed since 19th centuries and embed as the local culture. As we see technology should be accessible for everyone, warung is a great pot for Indonesia everyday people to be immersed in the digital economy.”
“In Jakarta alone, there is more than 50,000 warung in 2014. Based on our research, each warung makes roughly IDR 1,5 million (USD 110) per day. The interesting part is, on top of the retail shop, warung also acted as a local community center. Customers will spend hours to sip coffee while charging their smartphone, or watch a football match together in nearby warung.” added Harya Putra, COO of Warung Pintar.
Willson Cuaca, the Managing Partner of East Ventures, says, “While the adoption of digital platforms by consumers and merchants is gaining fast momentum in Indonesia, we do notice that there is a certain segment of society that has no such privilege due to their overall lack of exposure to the digital world. Warung Pintar has taken a different approach to serve this unprivileged segment, not only by providing them with digital platforms but also by building a physical presence for them to operate. We build end-to-end solutions, including finding the land, financing, merchandising, and marketing.”
He added, “Warung Pintar offers a partnership model with warung owners. Proprietors need only to provide commitment, honesty, and their time to mend the warung as needed. This project is the antithesis of existing e-commerce unit economics with smaller basket sizes, nonrepetitive users and small margins”.
Joining in the core team of Warung Pintar are Sofian Hadiwijaya and Pandu Kartika Putra. Responsible as a tech lead in the team, Sofian is an active community builder in Indonesia tech ecosystem. His past responsibility includes leadership position in Kudo, Pinjam.co.id, and Go-Jek. Putra was an associate of the civic project for East Ventures. Before that, he was a civic tech specialist who has been involved in several activities like Code for Bandung and Code4Nation.
Warung Pintar as Platform for Collaboration
Warung Pintar serves as the epitome of East Ventures’ portfolio integration. Key parts of technology from East Ventures’ portfolio firms are included across the board. The Warung Pintar cash register is powered by MokaPOS. The bookkeeping and accounting system is provided by Jurnal. The users get phone credit topped up, as well as train tickets and other goods offered by Kudo. A fulfillment and last mile distribution system is provided by DoCart. A distribution warehousing system is managed by Waresix. All the warungs are serving EVHive coworking space customers, and an army of readytouse rides are provided by Grab.
“We see Warung Pintar as the technology platform which connects multiple opportunities for our partners. We believe there is room to explore and we do welcome more partners from both tech and non-tech companies, ” says Bezharie.
“We have seen significant value creation by this product since the ideation within East Ventures to the prototype when it hit the street. The seed round will help us accelerate product iteration to serve a wider market and figure out the right business model. We are grateful that many investors understand our vision and support us at this early journey.
Our mission is to make more of a social impact rather than earn money with this initiative,” explains Cuaca. “This is a passion project which carries a strong vision of technological inclusion for all Indonesians.”