Manufacturing startup Bababos believes it is on the ‘path-to-profitability’ which is strong after focusing on improving business fundamentals through significant improvements throughout 2023.
To DailySocial.id, Co-Founder and CEO of Bababos Fajar Adiwidodo said that these improvements include strategies for accessing markets, encouraging productivity, developing platforms, and managing risks. With this focus, the company can consistently provide low prices with better quality and delivery, which was not available before.
As a result, Bababos has now reached more than 400 IKM manufacturers and processes hundreds of transactions per month with growth of 30% every month. His party also claims to have contributed to increasing machine utilization from initial production volumes of below 50% to increasing threefold.
“We have path-to-profitability the strong one. This actually happened keypoints we got funding. Every transaction we make makes a profit, which can already be covered sales, operations and salary. Our direct costs are so low, so that’s it sustaining. We just push the margins, the more we scale, and more productivity,” CEO of Bababos, Fajar Adiwidodo said.
Bababos is a platform that brings together small and medium industrial manufacturers (IKM) with raw material suppliers. There are three solutions offered, namely supply of manufacturing raw materials, demand aggregation, and tempo facilities.
Apart from that, it is trying to strengthen its position as supply chain platforms with a focus on its capabilities in demand aggregation and payment. Bababos is not involved in stocking goods to avoid price speculation and make it easier to scale the business.
“Conversion rate we went up drastically. So every transaction, we know the conversion rate. For us, 2023 is a fundamental year. “So, everything is needed for business to run strongly in 2023,” he said.
Bababos just closed the loop initial funding worth $3 million (around IDR 46 billion) in September 2023 led by East Ventures, , with participation from Patamar Capital and Accion Venture Lab.
Expansion and products
Bababos is considering expansion to strengthen its market on Java. Currently, Bababos services only reach the Jabodetabek and Surabaya areas. “We are trying to explore Central Java because there are still many industrial cities in Java,” said Fajar.
Referring to data from the Ministry of Industry, as many as 61,7% of industrial areas that are occupied and operating are still concentrated on the island of Java. However, industrial areas outside Central Java are being encouraged to become one of the drivers for the development of new economic centers.
Apart from that, he added, Bababos is also strengthening its financing services by building pricing engine (price recommendations) and credit engine (underwriting to collection). Fajar revealed that currently Bababos is doing it underwriting itself, but the loan facilities are channeled from financial institutions local and global.
“We are also developing features for supply and delivery. Just like Google where the front display is only visible search bar, but inside it is a very complex machine. Likewise with Bababos. We ensure that all these features can be used stairs all.”
The original article was published on DailySocial, 22 November 2023.