Indonesia’s Wahyoo eyes series B raise to bake in cloud kitchen ambition

Peter Shearer, a serial entrepreneur in Indonesia’s tech scene, built Wahyoo in 2017 to help small local restaurants – usually called warteg – to purchase stock and get visibility on online food-ordering apps. His company is similar to Stoqo, the B2B startup that shuttered in 2020, and Mitra Bukalapak, which also offer the same service for mom and pop retailers or warungs.

Wahyoo is currently raising a series B funding round. To date, the firm has secured US$6.5 million from East Ventures, Indogen Capital, Intudo Ventures, Global Brain, NH Absolute Return Partners, Evowood, and Nitto Prima Ventura, according to data from VentureCap Insights.

The new round is expected to close in early 2023, says Shearer, who also serves as Wahyoo’s CEO. He also told Tech in Asia that the final amount will be larger. The list of investors will include Eugene Asia Food Tech Fund-1, a vehicle of South Korea-based Eugene Investment and Securities, and Trinity Optima Corporation, an Indonesian entertainment firm.

Wahyoo’s top management: (from left) COO Daniel Cahyadi, CEO Peter Shearer, and CTO Michael Dihardja / Photo credit: Wahyoo

Shearer believes that the main challenge facing Wahyoo is keeping the loyalty of small restaurants. “The owners usually are satisfied with the conventional model and don’t feel that they need any change,” he explains.

In order to retain wartegs, Shearer decided to introduce a digital wallet feature several years ago that made it easier for restaurant owners to buy products on Wahyoo’s platform. And to help them get working capital, a pay-later service was also introduced.

The company recently stepped up its efforts by turning those small restaurants into cloud kitchen networks for other brands. This new business model can help Wahyoo’s partners increase their revenue and encourage them to continue using Wahyoo’s other services.

The funding injection will be used to expand Wahyoo’s cloud kitchen model by onboarding more restaurant partners and launching more white-label food brands. The company is also looking to promote its food brands to a bigger audience by tapping into Eugene Investment’s marketing know-how and Trinity Optima’s network of celebrities.

Journey into cloud kitchens

Shearer entered Indonesia’s tech scene in 2007 by developing mobile apps. Eventually, he established AR&co, a startup specializing in augmented reality.

He began building Wahyoo in 2017, starting off with advertising as the business model. This early iteration of Wahyoo connected small restaurants with companies that wanted to put their branding inside a warteg’s physical premises, such as the dining tables or the building itself.

“After that, those restaurants started to ask us to help them in sourcing products. That’s how the B2B commerce business started,” Shearer recalls.

But it wasn’t long until he realized that in the B2B commerce industry, it’s hard to retain customer loyalty. Merchants can source from other suppliers or through offline distributors, especially if they can buy the products at a cheaper price. Without going into specifics, Shearer also shared that the margin from this business is also razor-thin.

That’s why when this year began, Wahyoo started to explore the cloud kitchen model, which offers better margins and can boost loyalty among its partner restaurants.

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