East Ventures leads $3m round of Indonesian raw materials platform

(From left) Bababos co-founders Sigit Aryo Tejo, Fajar Adiwidodo, and Hendrik Panca / Photo credit: Bababos

MSMEs play a big role in Indonesia’s economy. In 2019, the Indonesian government reported that there were 65.4 million MSMEs in Indonesia, constituting 60.5% of its GDP.

But for many of these small companies across the region, digitalization is still a new concept, and this provides opportunities for big tech companies as well as startups to fill the gap.

One such player is Indonesia-based Bababos, which targets SMEs in the manufacturing space. The startup operates a platform that matches these SMEs with suppliers of raw materials like steel, polymers, and chemicals.

Bababos recently raised US$3 million in its seed round led by East Ventures.

Funding details

• Funding amount: US$3 million
• Lead investors: East Ventures
• Other investors: Patamar Capital, Accion Venture Lab
• Stage: Seed
• Source

Aside from helping clients find raw material supplies and aggregate demand, Bababos’ core service also includes providing customers with flexible payment terms.

Currently operational in the Greater Jakarta and Surabaya areas, Bababos said it has worked with over 400 SME manufacturers, with the “majority” experiencing 2x to 3x business growth. It aims to reach 1,000 SME manufacturers by the end of 2023.

See also: This Indonesian startup speeds up auto repair shops’ digital transition

“We are optimistic about the market potential as we witness a significant demand increase from SME manufacturers until the end of Q3,” Bababos CEO Fajar Adiwidodo said in a statement.

Bababos is not the first Indonesian manufacturing startup to raise fresh funds this year. Imajin raised a seed round from East Ventures and 500 Southeast Asia, while Tin Men Capital injected US$8 million into Manuva.

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