Billionaire Amazon founder Jeff Bezos made his first investment in a Southeast Asian e-commerce start-up final month.
But it is in not one of many area’s billion-dollar unicorns. It’s in a mom-and-pop store start-up that is 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.
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.
Founded in January 2020 by CEO Mehra, the corporate has thrived below a pandemic-induced shift to digital, up to now elevating over $117 million in funding from huge 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.
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 big 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.
“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,” mentioned 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.”
Indonesia, with its huge inhabitants and fast-growing financial system, is seen as an enormous alternative for entrepreneurs and traders.
Central to which can be the nation’s millions 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 in the smaller cities and provinces exterior the capital Jakarta, accounting for nearly three-quarters (72%) of the nation’s $47 billion consumer goods sales.
Yet many nonetheless depend on conventional means of replenishing their provides by shuttering their shops after they go to wholesalers to refill wares.
“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 every of Ula’s traders, 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.
Mehra needed to simplify that course of by making a business-to-business platform that might allow stallholders to order inventory at aggressive charges and have it delivered to their retailer for a small price.
So, he referred to as on his contacts in 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 government Derry Sakti rounded out the founding workforce.
“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?,” mentioned Mehra.
The enterprise received off to a gentle 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, at the same time as buyer demand for each day necessities grew. That prompted many mom-and-pop outlets to pile onto the platform.
“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,” mentioned Mehra.
The founders responded shortly, onboarding tens of 1000’s of stallholders and increasing their workforce of 15 to 400 throughout Indonesia, Singapore and India. That speedy progress caught the attention of traders, serving to them to entice their first round of investment inside six months.
“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,” mentioned Sequoia India’s Anand.
In October 2021, Ula closed its Series B spherical, elevating $87 million. Mehra mentioned 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 supply stallholders with small loans.
Within the following 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 equivalent to attire and expertise, with the final word objective of doubling their revenue.