GudangAda serves up more sensational numbers as it inches closer to profitability

GudangAda, the Indonesian business-to-business (B2B) ecommerce startup, is back with a fresh round of investment and more eye-popping numbers to go along with it.

First off, the company recently got over US$100 million from its oversubscribed series B round, which was higher than its initial goal. With the latest funding, the company has raised a total of US$135 million in just two and a half years of its existence.

What’s more, GudangAda says it has also accumulated US$6 billion in net merchandise value (NMV) since its inception. The metric is calculated by deducting expenses and fees from gross merchandise value (GMV). The company says it is close to breakeven and expects to turn a profit within the next year and a half.

GudangAda founder and CEO Stevensang / Photo credit: GudangAda

Given that it only started monetizing its business early last year, GudangAda’s current financial position was made possible by the company’s asset-light business model, according to founder and CEO Stevensang.

“We don’t buy goods, we don’t carry inventory, and we don’t sell anything. Our only [cash] burn is for operations and some digital marketing,” says Stevensang. He adds that apart from marketplace commissions, the company is also raking in revenue from its newly launched logistics services.

The B2B ecommerce space is getting crowded in Indonesia, with startups and tech giants alike staking their claims in the market. But GudangAda is betting that its unique marketplace approach would eventually give it the edge.

“As the business continues to grow, it will also become increasingly important for the company to stick with its ‘capital productivity’ mindset, which has been core to the company since the very beginning,” says Pitra Harun, co-founder and Indonesia country head of Asia Partners, which invested in GudangAda’s latest round. “Doing so will help the company to not only continue, but accelerate its positive economics.”

A different approach from the competition

While the marketplace model is common in consumer ecommerce, the opposite is true in the B2B sphere. Almost all of the other tech players in Indonesia’s supply chain industry have opted against the marketplace model in favor of an inventory-carrying approach, which involves companies sourcing goods from principals and directly selling them to retailers.

GudangAda’s peers like Ula, Mitra Bukalapak, and Warung Pintar have all chosen this distributor-like role. It’s an attractive strategy as it allows these players to control pricing and gain significant gross margins from each sale.

GudangAda, on the other hand, connects players within the supply chain without holding its own inventory. Instead of acting as a distributor, the company allows wholesalers to list their products and sell directly to retailers on the GudangAda app for a small transaction fee of 2% to 5%.

See more: 9 highlights from Bukalapak’s confidential investor deck

Stevensang argues that GudangAda’s B2B marketplace model is the most feasible way for a tech company to digitalize players in the sector.

A tech company that uses a distributor model needs “to invest in infrastructure in every region because Indonesia is an archipelago,” he notes. “This requires time and huge capital.”

Eye-popping numbers

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