From bookkeeping to SME neobank, BukuKas raises $50m in series B round

Small and medium-sized enterprises (SMEs) are the backbone of Indonesia’s economy. But according to BukuKas co-founder Krishnan Menon, most big startups in the country haven’t treated them as “the center of the universe.”

“If you take Gojek, Grab, Tokopedia, and others, who are their real customers? It is the end users. They try to serve merchants, but at the end of the day, the end customers come first for them,” he tells Tech in Asia.

That’s what BukuKas is trying to do differently. The company started as a bookkeeping platform that allows business owners to record and manage their sales and expenses. It later expanded to inventory management, invoicing, and analytics.

Menon says that his motivation is to bring a bank experience to all SMEs in the country and give them a full financial stack. “Our bigger vision is how to make one of the best SME-centric neobanks.”

BukuKas co-founders Lorenzo Peracchione (left) and Krishnan Menon / Photo credit: BukuKas

In just one and a half years, BukuKas has onboarded 6.3 million business owners – from fashion retailers, food merchants, cellphone counters, social commerce sellers, to wholesalers. Its platform has also recorded an annualized transaction value of US$25.9 billion, which is equivalent to 2.2% of Indonesia’s gross domestic product.

With a combined 3 million monthly active users, BukuKas is leading its competitors in terms of active users, estimates one third-party analytics platform.

The firm has just raised US$50 million in series B funding from existing and new investors, including product guru Gokul Rajaram and TransferWise co-founder Taavet Hinrikus.

The fresh funds will be deployed to strengthen BukuKas’ leadership team, engineering and product capabilities in both its Jakarta and Bangalore offices, as well as expand its range of services.

Two-horse race in Indonesia

BukuKas is one of several digital bookkeepers that has ignited a VC-fueled race in Indonesia. Among them is also East Ventures-backed BukuWarung, which has attracted a huge amount of funding and is rumored to raise US$70 million in its next round.

According to Menon, Indonesia has a tendency for capital concentration into just two companies, where the third and fourth player will be quite far behind. “However, in two to five years, there will be new players coming up, like Shopee in ecommerce,” he says.

The co-founder doesn’t expect a big market like Indonesia to result in a winner-take-all case, especially in financial services. This means that while the top player will take more market share, the second will be big as well, and smaller firms will also have a place.

But bookkeeping is only a startup point, Menon says. What BukuKas builds from here may be different from other companies like BukuWarung.

“We are building things into our vision, which is how to get more and more people digitized, how people engage more with them, and solve for their commerce and finance. Soon we will launch more features around this,” Menon explains.

Founded by Lazada mafia

Treated as a gaming company