Indonesian O2O startup Kudo lands funding for multi-payment ecommerce solution

Kudo, an online-to-offline ecommerce startup from Jakarta, today announced a seven-digit funding round led by GREE Ventures and East Ventures (Disclosure: East Ventures also invests in Tech in Asia. See our ethics page). 500 Startups and IMJ Investment Partners also participated in the round. This new funding comes just a few months after Kudo announced its seed round from East Ventures in November 2014.

Kudo offers an interesting way for middle-class Indonesians to shop online. The team builds physical ecommerce kiosks that accept various forms of payment, including cash. Kudo then places its kiosks in public places around Jakarta and targets local consumers who may otherwise not be inclined to go through a traditional estore. The company also utilizes sales agents to help sell the products directly with mobile tablets.

“This strategic investment will nicely complement our growing portfolio in Indonesia. The funds will be used [by Kudo] to expand their wildly successful pilot program launched in early December,” says Kuan Hsu, Principal of GREE Ventures. “Kudo will accelerate the growth of online transactions in Indonesia by providing a platform to bridge the gap between the digital ecommerce space and offline retail space.”

Empowering the unbanked

“Kudo’s platform is unique and probably only works in emerging countries,” adds Willson Cuaca, co-founder and managing partner of East Ventures. “Albert and Agung have been showing determination to address the 81.4 percent of Indonesians that are unbanked. Only 19.6 percent of Indonesian people have access to banks and financial products […] The opportunity is humongous.”

See: This startup bets that its kiosks can take Indonesian ecommerce to the next level

The Boston Consulting Group forecasts an additional 70 million in Indonesia’s middle class by 2020. However, while there has been significant growth in consumer spending, there is still a sizable gap in the necessary payment, logistics, and internet infrastructure.

“We aim to bridge the gap towards a fully functioning e-commerce ecosystem in Indonesia, says Albert Lucius, CEO and co-founder of Kudo. “We strongly believe that Kudo’s social commerce model will truly elevate Indonesia’s ecommerce scene to the next level […] Kudo is riding on the rise of ecommerce in Indonesia by enabling buyers to conveniently shop online, even without internet.”

According to the team, the new funds will also be used to fuel expansion in more Indonesian cities. “Around 70 percent of our existing customers are first time online buyers, and more than 40 percent of them are recurring buyers,” says Agung Nugroho, COO and co-founder of Kudo. “The market demand for our service is very clear and now is the time to scale.”

The company aims to have at least 1,000 active agents within the next few months. After three months of operations, Kudo claims to be handling more than 600 transactions per day, and hopes to reach 8,000 daily transactions in the next three to six months.