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Indonesian fintech startup BukuWarung gets new funding to add financial services for small merchants

A month after completing Y Combinator’s accelerator program, BukuWarung, an financial tech startup that serves small businesses in Indonesia, announced it has raised new funding from a roster of high-profile investors, including partners of DST Global, Soma Capital and 20VC.

The amount of the funding was undisclosed, but a source told TechCrunch that it was between $10 million to $15 million. The new capital will be used to hire for BukuWarung’s technology team. TechCrunch first profiled BukuWarung in July.

Angel investors in the round include several high-profile founders and executives: finance technology platform Plaid’s co-founder William Hockey; Tinder co-founder Justin Mateen; Superhuman founder Rahul Vohra; Adobe chief product officer Scott Belsky; Clearbit chairman and startup advisor Josh Buckley; former Uber chief product officer Manik Gupta; Spotify’s former head of new markets in Asia Sriram Krishnan; 20VC founder Harry Stebbings; Nancy Xiao, an investor with Bond Capital; and Fast co-founder Allison Barr Allen. Angel investors from WhatsApp, Square and Airbnb also participated.

Launched last year by co-founders Chinmay Chauhan and Abhinay Peddisetty, BukuWarung is targeted at the 60 million “micromerchants” in Indonesia, including neighborhood store (or warung) owners. The app was originally created as a replacement for pen and apper ledgers, but plans to introduce financial services including credit, savings and insurance. In August, the company integrated digital payments into its platform, enabling merchants to take customer payments from bank accounts and digital wallets like OVO and DANA. BukuWarung’s goal is to fill the same role for Indonesian merchants that KhataBook and OKCredit do in India.

One of the reasons BukuWarung launched digital payments was in response to customer demand for contactless transactions and instant payouts during the COVID-19 pandemic. Since introducing the feature, the company said it has already processed several million U.S. dollars in total payment volume (TPV) on an annualized basis. The company says it now serves about 1.2 million merchants across 750 locations in Indonesia, focusing on tier 2 and tier 3 cities.

Digital payments is also the first step into building out BukuWarung’s financial services, which will help differentiate it from other bookkeeping. The payments features is currently free and BukuWarung is experimenting with different monetization models, including making a small margin on fees.

“The reason why we launched payments is also very strategic, because there is a lot of pull in the market. We have already seen several millions annualized TPV in less than a month, because the payments we offer are cost-efficient as well and cheaper than to get from a bank,” Chauhan told TechCrunch.

“If you look at the Indian players, like Khatabook, they have also launched digital payments. The reason for that is because it’s a very essential step for building a business and monetization,” he added. “If you don’t have payments, you can’t do anything like that.”

Chauhan added that building a financial services platform is the difference between providing a utility app that replaces bookkeeping ledgers, and becoming an essential service for merchants that will eventually include lending for working capital, savings and insurance products. The bookkeeping features on BukuWarung will feed into the financial services aspect by providing data to score creditworthiness, and help small merchants, who often have difficulty securing working capital from traditional banks, get access to lines of credit.

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Indonesian cloud kitchen startup Yummy gets $12 million Series B led by SoftBank Ventures Asia

Yummy Corporation, which claims to be the largest cloud kitchen management company in Indonesia, has raised $12 million in Series B funding, led by SoftBank Ventures Asia. Co-founder and chief executive officer Mario Suntanu told TechCrunch that the capital will be used to expand into more major cities and on developing its tech platform, including data analytics.

Other participants in the round included returning investors Intudo Ventures and Sovereign’s Capital, and new backers Vectr Ventures, AppWorks, Quest Ventures, Coca Cola Amatil X and Palm Drive Capital. The Series B brings Yummy Corporation’s total raised so far to $19.5 million.

Launched in June 2019, Yummy Corporation’s network of cloud kitchens, called Yummykitchen, now includes more than 70 HACCP-certified facilities in Jakarta, Bandung and Medan. It partners with more than 50 food and beverage (F&B) companies, including major brands like Ismaya Group and Sour Sally Group.

During COVID-19 movement restrictions, Suntanu said Yummykitchen’s business showed “healthy growth” as people, confined mostly to their homes, ordered food for delivery. Funding will be used to get more partners, especially brands that want to digitize their operations and expand deliveries to cope with the continuing impact of COVID-19.

The number of cloud kitchens in Southeast Asia has grown quickly over the past year, driven by demand for food deliveries that began increasing even before the pandemic. But for F&B brands that rely on deliveries for a good part of their revenue, running their own kitchens and staff can be cost-prohibitive. Sharing cloud kitchens with other businesses can help increase their margins.

Other cloud kitchen startups serving Indonesia include Hangry and Everplate, but these companies and Yummy Corporation are all up against two major players: “super apps” Grab and Gojek, which both operate large networks of cloud kitchens that have the advantage of being integrated with their on-demand delivery services.

Suntanu said Yummy’s main edge compared to other cloud kitchens is that it also offers fully-managed location and kitchen operation services, in addition to kitchen facilities. This means Yummy’s partners, including restaurants and and F&B brands, don’t need to hire their own teams. Instead, food preparation and delivery is handled by Yummy’s workers. The company also provides its clients with a data analytics platform to help them with targeted ad campaigns and making their listings more visible on food delivery apps.

In a statement, Harris Yang, Souteast Asia associate at SoftBank Ventures Asia, said the firm invested in Yummy because “given the company’s strong expertise in the F&B industry and unique value proposition to brands, we believe that Yummy will continue to be the leader in this space. We are excited to support the team and help them scale their business in this emerging sector.”

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From Asia to Africa, China Promotes Its Vaccines to Win Friends

The Philippines will have quick access to a Chinese coronavirus vaccine. Latin American and Caribbean nations will receive $1 billion in loans to buy the medicine. Bangladesh will get over 100,000 free doses from a Chinese company.

Never mind that China is still most likely months away from mass producing a vaccine that is safe for public use. The country is using the prospect of the drug’s discovery in a charm offensive aimed at repairing damaged ties and bringing friends closer in regions China deems vital to its interests.

Take, for example, Indonesia, which has long been wary of Beijing. China’s leader, Xi Jinping, assured the nation’s president, Joko Widodo, in a call last week: “China takes seriously Indonesia’s concerns and needs in vaccine cooperation.”

Mr. Xi hailed the two countries’ cooperation on developing a vaccine as “a new bright spot” in relations, according to a statement from China’s Foreign Ministry. “Together, China and Indonesia will continue to stand in solidarity against Covid-19,” he promised.

China’s vaccine pledges, on top of earlier shipments of masks and ventilators around the world, help it project itself as a responsible player as the United States retreats from global leadership. Beijing’s moves could also help it push back against accusations that the ruling Communist Party should be held responsible for its initial missteps when the coronavirus first emerged in China in December.

The ability to develop and deliver vaccines to poorer countries would also be a powerful signal of China’s rise as a scientific leader in a new post-pandemic global order.

“People are very willing to take a Chinese vaccine,” said Ghazala Parveen, a senior official at the National Institute of Health in Pakistan, where two Chinese vaccine makers are conducting trials. “In fact, we are being asked by people to have the vaccine ready as soon as possible.”

By some measures, China is leading the global race for a Covid-19 vaccine. It has four candidates in the last phase of clinical trials, more than any other country.

The United States has three vaccine candidates in late-stage trials, with Pfizer saying it could apply for emergency approval as early as October and Moderna saying it hopes to have a vaccine by the end of the year. AstraZeneca, a British-Swedish company that received U.S. government funding to develop its vaccine, paused its late-stage global trials this week because of a serious suspected adverse reaction in a participant.

China has approved at least two experimental vaccines under an emergency use program that started in July with soldiers and employees of state-owned companies and has quietly expanded to include health care and aviation workers. Its vaccine makers have built factories that can produce hundreds of thousands of doses.

Mr. Xi has declared that China would make domestically developed vaccines a global public good, though his government has provided few details.

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Credit…Ding Haitao/Xinhua, via Associated Press

China has long viewed contributing to global health as an opportunity to build its soft power.

“The government definitely would like to see that China is successful in producing a good vaccine and that many countries want it,” said Jennifer Huang Bouey, an epidemiologist and China expert at the RAND Corporation. “It’s beneficial for its diplomacy and changing the narrative on Covid.”

But Chinese vaccine companies that have gone abroad to conduct clinical trials have generated controversy amid fears that local residents are being treated like guinea pigs. And with so much still unknown about the coronavirus, the vaccines could make it to the last stage of trials only to stumble.

Despite the uncertainty, Beijing has pushed its prospective vaccines with confidence and has used them to help smooth over frictions.

Last month, Premier Li Keqiang met with officials from Thailand, Laos, Cambodia and Vietnam to damp criticism that China had contributed to a devastating drought in the Southeast Asian nations. He also offered Chinese vaccines — a proposal that was well received.

In a speech during the same summit, Prime Minister Hun Sen of Cambodia, a staunch supporter of China, singled out Beijing for praise, saying he “would like to give a high appreciation of efforts of our friend China in producing a vaccine.”

In the Philippines, where China is competing with the United States for influence, President Rodrigo Duterte told lawmakers in July that he had “made a plea” to Mr. Xi for help with vaccines. He also said he would not confront China over its claims to the South China Sea.

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Credit…Iqbal Kusumadireza/EPA, via Shutterstock

A day later, Wang Wenbin, a spokesman for China’s Foreign Ministry, said China was willing to give the Philippines priority access to a vaccine.

Chinese leaders have made similar offers to countries in Africa, Latin America, the Caribbean, the Middle East and South Asia — regions where Beijing has sought to expand its influence.

“We pledge that once the development and deployment of the Covid-19 vaccine is completed in China, African countries will be among the first to benefit,” Mr. Xi told a meeting of African leaders in June. The Chinese foreign minister, Wang Yi, promised in July that China would extend $1 billion in loans for vaccines to Latin American and Caribbean countries, according to the government of Mexico.

For all its talk of providing vaccines as a public good, China seems determined to do so only on its own terms. It has been reticent on whether it plans to join Covax, a World Health Organization-backed mechanism that aims to help countries distribute a coronavirus vaccine equitably. (The Trump administration has flat-out rejected the initiative.)

“In fact, we have already cooperated with some countries,” Hua Chunying, a spokeswoman for China’s Foreign Ministry, told reporters last week. “China always keeps its word.”

If China wins the race for a vaccine, it will owe its success to some of these countries, which have played an indispensable role by providing Chinese vaccine makers with human test subjects.

Chinese drugmakers have taken their research abroad because the outbreak at home has been under control for months.

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Credit…Nicolas Asfouri/Agence France-Presse — Getty Images

In Bangladesh, Sinovac Biotech, a vaccine maker based in Beijing, is testing its vaccine on 4,200 health care workers in Dhaka, the capital. The Chinese company has agreed to provide over 110,000 free vaccine doses to the country, according to Dr. John D. Clemens, executive director of Bangladesh’s International Center for Diarrhoeal Disease Research, which is helping conduct the trials.

That is a tiny fraction of the 170 million residents of Bangladesh, one of Asia’s poorest countries. And despite their participation in the Chinese clinical trials, Bangladeshis fear that the vaccines that result may be priced out of the reach of most of the country’s citizens.

“If any person in the world gets deprived of their right to a Covid-19 vaccine because of patent rights and profitability, this would be the biggest injustice in this century,” said Md. Sayedur Rahman, a professor of pharmacology at Bangabandhu Sheikh Mujib Medical University in Dhaka.

The Foreign Ministry in Beijing has emphasized that China will not seek to establish a monopoly on vaccine supply. State news media reports have also rejected accusations that China is using vaccines as a diplomatic tool, while government-backed academics assert that the provision of vaccines is altruistic.

“There will certainly be no strings attached,” said Ruan Zongze, executive vice president of the China Institute of International Studies. “Since it is going to be a global public good, adding any conditions would arouse suspicion from the other party.”

But China is already drawing concern in countries on the receiving end of its overtures, as well as from regional powers that view Beijing as encroaching on their spheres of influence.

In Nepal, where China would like to conduct clinical trials on 500 workers in a cement company, politicians have raised questions about the safety of the vaccines and the lack of transparency.

“Shouldn’t we be assured about its side effects?” Prakash Sharan Mahat, a former foreign minister of Nepal and a leader of the country’s main opposition party, Nepali Congress, said in an interview.

India, which is wary of Beijing’s intentions in South Asia, has responded to China’s offers of vaccines for Bangladesh and Nepal with its own pledges to provide its allies with vaccines.

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Credit…Roman Pilipey/EPA, via Shutterstock

Some countries may have few alternatives to China.

Indonesia has started a last-stage clinical trial for Sinovac on 1,620 volunteers and has signed an agreement with the Chinese company for 50 million doses of Covid-19 vaccine concentrate that would allow an Indonesian state-owned vaccine maker, PT Bio Farma, to produce doses locally.

Some political experts in Indonesia worry about the leverage that China would wield over the country, but they acknowledge that Indonesia has little choice.

“Should we be suspicious, or should we be grateful?” asked Muhammad Zulfikar Rakhmat, an academic at Universitas Islam Indonesia, who researches China’s foreign policy in Indonesia.

“I think both.”

Reporting was contributed by Julfikar Ali Manik, Muktita Suhartono, Bhadra Sharma and Salman Masood. Amber Wang and Claire Fu contributed research.

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InfraDigital helps Indonesian schools digitize tuition and enrollment

In Indonesia, about half of adults are “underbanked,” meaning they don’t have access to bank accounts, credit cards and other traditional financial services. A growing list of tech companies are working on solutions, from Payfazz, which operates a network of financial agents in small towns, to digital payment services from GoJek and Grab. As a result, financial inclusion is increasing for consumers and small businesses in Southeast Asia’s largest country, but one group remains underserved: schools.

InfraDigital was founded in 2018 by chief executive officer Ian McKenna and chief operating officer Indah Maryani. Both have backgrounds in financial tech, and their platform enables parents to pay school tuition with the same digital services they use for electricity bills or online shopping. The startup currently serves about 400 schools and recently raised a Series A led by AppWorks.

Many Indonesian schools still rely on cash payments, which are often delivered by kids to their teachers.

“My kid had just started school, and one day I spotted my wife giving him an envelope full of cash for tuition. He was only three years old,” McKenna said. “That triggered my curiosity about how these financial systems work.”

To give parents an easier alternative, InfraDigital, which is registered with Indonesia’s central bank, partners with banks, convenience store chains like Indomaret, online wallets and digital payment services like GoPay to allow them to send tuition money online.

“The way you pay your electricity bill, it’s likely that your school is already there, regardless of whether you have a bank account or live in a really remote place” where many people make cash payments for services at convenience stores, McKenna said. The startup is now working on a system for schools in areas that don’t have access to convenience store chains and banks.

Before building InfraDigital’s network, McKenna and Maryani had to understand why many schools still rely on cash payments and paper ledgers to manage tuition.

“Banks have been trying to tap into the education market for a long time, 12 to 15 years probably, but no one has become the biggest bank for schools,” said Maryani. “The reason behind that is because they come in with their own products and they don’t try to resolve the issues schools are facing. Since they are focused on the consumer side, they don’t really see schools or other offline businesses as their customers, and there is a lot of customization that they need to do.”

For example, a school might have 2,000 students and charge each of them about USD $10 a month in school fees. But they also collect separate payments for books, uniforms, and building fees. InfraDigital’s founders say schools typically send out an average of about 2.5 invoices a month.

Digitizing payments also makes it easier for schools to track their finances. InfraDigital provides its clients with a backend application for accounting and enrollment management. It automatically tracks tuition payments as they come in.

“People don’t get paid that much and they are ridiculously busy taking care of thousands of kids. It’s really, really tough,” McKenna said. “When you’re giving them a solution, it’s not about features, it’s not about tools, it’s about the practicalities of their day-to-day life and how we are going to assist them with it. So you remove that burden from them.”

During the COVID-19 pandemic, which resulted in movement restriction orders in different areas of Indonesia, InfraDigital’s founders say the platform was able to forecast trends even before schools officially closed. They started surveying schools in their client base, and sent back data to help them forecast how school closures would affect their income.

“From the school’s perspective, it’s a really damaging situation, with 30% to 60% income drops. Teachers don’t get paid. If the economy goes down, parents at lower-income schools, which are a big part of our client base, won’t be able to pay,” McKenna said. “It’s built into the model, and we’ll continue seeing that however long the economic impact of COVID-19 lasts.”

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Gojek appoints Amazon, Microsoft veteran as its new chief technology officer

Indonesia-based ride-hailing company and “super app” Gojek said today that it has named a new chief technology officer. Severan Rault, who previously held leadership positions at Amazon and Microsoft, takes over the role from Ajey Gore, who announced last month he was leaving for personal reasons.

In a statement, the company said Rault will oversee Gojek’s engineering teams in Southeast Asia and India and report to co-chief executive officer Kevin Aluwi.

Rault has a long history of leading engineering teams at large tech companies, as well as his own startups.

Before joining Gojek, Rault worked at Betawave, a virtual reality studio he founded in 2016. During his stint at Amazon, Rault was one of the founders of Prime Air, the company’s drone delivery program. At Microsoft, he was the principal architect of Bing, the company’s search engine. Rault’s other experience include founding Kikker Interactive, a wireless solutions provider that was acquired by Microsoft in 2008.

Rault’s appointment comes at a critical time for Gojek as it faces competition from rival Grab and deals with the fallout of the COVID-19 pandemic. Last month, Gojek said it was laying off 430 employees, or about 9% of its workforce, and closing GoLife, its lifestyle services division, to focus on its core payments, transportation and food delivery businesses as part of its long-term response to the pandemic.

Founded in 2010 as a motorcycle ride-hailing company, Gojek has since transformed itself into a “super app” that offers online payments and a roster of on-demand services, including transportation, ecommerce deliveries and logistics. Gojek recently added Facebook and PayPal to a list of high-profile investors, including Google and Tencent.

Gojek disclosed in March that it is valued at $10 billion and now has over 170 million users, but it faces fierce rivalry from Grab, another Southeast Asian on-demand ride-hailing and logistics platform that is also building an online financial services business. With a valuation of $14 billion, Grab is the larger company. Earlier this year, reports emerged that the two were discussing a merger, which Gojek denied and Grab declined to comment on.

In statement, Rault said, “It is a time like no other to be at Gojek. The company is entering a critical phase as it moves from startup to maturation and it’s special to be a part of that. Building systems and processes for a business of Gojek’s scale and complexity is a challenge one rarely enjoys in their career and I’m grateful for the opportunity.”

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Igloo raises $8.2M to bring insurance to more people in Southeast Asia

Singapore-based Igloo, formerly known as Axinan, has raised $8.2 million as the insurance-tech startup looks to broaden its foothold in half a dozen Southeast Asian markets and Australia.

InVent, a corporate venture capital arm of telecommunications firm Intouch Holdings, led Igloo’s extended Series A round, the startup told TechCrunch. Existing investors Openspace Ventures, a venture capital fund that invests in Southeast Asia, and Linear Capital, a Shanghai-based early-stage venture capital firm focusing on tech-driven startups, participated in this round, which makes four-year-old Igloo’s to-date raise to $16 million. It raised about $1 million in its Seed financing round.

Igloo — founded by Wei Zhu, who previously served as Chief Technology Officer at Grab — works with e-commerce and travel firms such as Lazada, RedDoorz, and Shopee in Southeast Asia to offer their customers insurance products that provide protection on electronics, and coverage on accidents and travel.

The startup, which also operates in Vietnam, Philippines, Thailand, Singapore, Indonesia, and Malaysia, said more than 15 million users have benefitted from its insurance products to date, and in the last one year it has processed more than 50 million transactions.

Igloo, which rebranded from Axinan this month, said insurance products are proving especially useful to — and popular among — people during the coronavirus outbreak.

Raunak Mehta, Chief Commercial Officer at Igloo, told TechCrunch that the startup has seen a surge in transactions and customer acquisitions in the last 45 days. “While some travel related business have seen a dip, the larger e-commerce business continues to see a surge,” he added.

“With COVID-19 impacting every facet of personal life and business, digitisation can help the world adjust to the new normal. This is especially apparent in insurance, where we can tap on digital channels for distribution and also for creating awareness,” said Zhu.

“We see that digital insurance is on the rise in Southeast Asia, and we believe that Igloo, with our digital-first approach and expansion of our product portfolio into personal health, accident and other related products can help fill those gaps and address consumers’ needs for personal well-being,” he added.

He said the digital insurance penetration remains low in Southeast Asia, and Igloo sees massive opportunity in the space. According to one estimate (PDF), Southeast Asia’s digital insurance market is currently valued at $2 billion and is expected to grow to $8 billion by 2025.

The startup, which competes with a handful of startups including Singapore Life and Saphron, will use the fresh capital to expand its business development and engineering teams and broaden its presence in the half-dozen markets. It is already engaging with telecom operators, banks, non-banking financial firms, and travel agencies, it said.

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