Billionaire Amazon founder Jeff Bezos made his first investment in a Southeast Asian e-commerce start-up final month.
But it's in not one of many area's billion-dollar unicorns. It's in a mom-and-pop store start-up that's been round for lower than two years.
And its founders? Some of Bezos' former workers.
"It was incredibly fortunate and a huge fan boy moment for me," Ula CEO Nipun Mehra, 40, instructed CNBC Make It.
Business impressed by Bezos
Indonesian e-commerce start-up Ula is a wholesale market aiming to modernize the nation's tens of millions of mom-and-pop kiosks, or warungs, by offering stock and supply companies in addition to financing.
Founded in January 2020 by CEO Mehra, the corporate has thrived below a pandemic-induced shift to digital, to this point elevating over $117 million in funding from massive names like Tencent and Lightspeed Venture Partners.
One amongst them is Bezos, whose household workplace Bezos Expeditions invested an undisclosed sum after one of many start-up's early backers instructed him about Ula.
The conventional method of doing e-commerce doesn't work … So it’s important to discover different methods of doing it.Nipun Mehraco-founder and CEO, Ula
Though 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 large Flipkart in his native India.
Like Bezos, Mehra yearned to be an entrepreneur. But it wasn't till years later, whereas working as an investor at Sequoia India, that he noticed a possibility to adapt the normal e-commerce mannequin for a brand new market: small meals kiosks in Indonesia.
Nipun Mehra, co-founder and CEO of Indonesian e-commerce market Ula.Ula
"The typical Amazon, Flipkart — or here in Southeast Asia we have Shopee, Lazada, Tokopedia and so on — has been more on the non-food side. Food is a very different way of running things," stated Mehra.
"Usually in emerging economies, their income profile is such that they have to buy frequently and in small baskets. The moment you get into that dynamic, the traditional way of doing e-commerce doesn't work. You can't deliver a three-, four-, five-dollar basket to somebody's home and do it profitably … so you have to find other ways 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 buyers.
Central to which are the nation's tens of millions of neighborhood kiosks, which promote fast paced shopper items, like drinks and packaged meals, in addition to home items.
Indonesia is dwelling to tens of millions of avenue stalls, often known as warungs, promoting each day necessities corresponding to meals and home items.Ula
They're an integral a part of society, particularly in the smaller cities and provinces outdoors the capital Jakarta, accounting for nearly three-quarters (72%) of the nation's $47 billion shopper items gross sales.
Yet many nonetheless depend on conventional means of replenishing their provides by shuttering their shops after they go to wholesalers to fill up wares.
They are very restricted by the bodily footprint that they will entry.Abheek Anandmanaging director, Sequoia India
"They are essentially run by one or two people, who act like consumers. They own the business; they need to procure things for themselves to sell," Abheek Anand, a managing director at Sequoia India, one in all Ula's buyers, instructed CNBC Make It.
"For them to tap into offline supply chains is actually very inefficient. They have to go to the local market, spend hours figuring out what to buy, where to buy it from. By and large, they are very limited by the physical footprint that they can access," he added.
Drawing on Amazon experience
Mehra needed to simplify that course of by making a business-to-business platform that will 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 in the e-commerce area to assist him notice the imaginative and prescient.
Ula co-founders Riky Tenggara, Derry Sakti and Alan Wong.Ula
His former colleague from Amazon, Alan Wong, Riky Tenggara from Lazada, and Procter & Gamble govt Derry Sakti rounded out the founding staff.
"We've learned all this stuff in Amazon, we've learned all this stuff at business school. How do we bring some of that into this little smartphone and help them both make more money as well as save more money?," stated Mehra.
Powering up in the pandemic
The enterprise received off to a gradual begin. But 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, whilst buyer demand for each day necessities grew. That prompted many mom-and-pop retailers to pile onto the platform.
The want in the market simply utterly switched. In lockdown, your first precedence is to get your meals, is to get issues that you just devour.Nipun Mehraco-founder and CEO, Ula
"The need in the market just completely switched. In lockdown, your first priority is to get your food, is to get things that you consume," stated Mehra.
The founders responded rapidly, onboarding tens of hundreds of stallholders and increasing their staff of 15 to 400 throughout Indonesia, Singapore and India. That fast development caught the attention of buyers, serving to them to entice their first spherical of investment inside six months.
Ula onboarded tens of hundreds of retailers onto its platform through the top of the pandemic.Ula
"The most exciting addition to the company is Jeff Bezos, who's invested, which is obviously nice validation for the business. But there are a number of other really smart people who have joined us along the way," stated Sequoia India's Anand.
An bold development agenda
In October 2021, Ula closed its Series B spherical, elevating $87 million. Mehra stated the money will go in direction of increasing its present market providing, in addition to launching a so-called purchase now, pay later service to offer stallholders with small loans.
Within the subsequent 18 months, the CEO hopes to quadruple the variety of retailers Ula works with from 70,000 right this moment to 300,000. He additionally hopes to assist retailers broaden into new classes corresponding to attire and know-how, with the last word aim of doubling their earnings.
That is what is going to result in a brand new type of retail. Not one thing which we’ve seen in the U.S. … It can be an Indonesia-specific, distinctive answer.Nipun Mehraco-founder and CEO, Ula
"Why restrict yourself to the items that are in your store? Why can't you order everything that your customer needs? Why can't you be that channel?," he stated.
"In my mind, that is what will lead to a new form of retail. Not something which we have seen in the U.S., not something which we have seen in China. It will be an Indonesia-specific, unique solution."
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