Examining GudangAda’s unprecedented numbers

Updated on July 21 with clarifications.

Within just a few months, GudangAda has skyrocketed to become one of the most well-funded tech startups in Indonesia. After raising US$10.5 million in seed funding in February, the company raised US$25.4 million in a series A round held three months later from prominent investors such as Sequoia India, Pavilion Capital, Alpha JWC Ventures, and Wavemaker Partners.

The company hopes to make it easier for wholesalers and retailers in the fast-moving consumer goods (FMCG) industry to buy and sell from one another. Through its app, which resembles online marketplaces Tokopedia and Shopee, users can transact, pay, and get their goods delivered, either through the sellers’ or GudangAda’s couriers.

The company is making some bold claims. Despite starting only at the end of 2018, it says it has already processed US$1 billion in transactions in the past 12 months, even as the Covid-19 pandemic swept the country. It charges 0.5% to 2% commission for each transaction, which means a potential annual revenue of US$20 million.

It also tells Tech in Asia that it has acquired 80,000 big retailers and almost all of the FMCG wholesalers – around 20,000 of them – in Indonesia. The startup has repeated the claim to various media outlets, stating in an emailed press release that it has “nearly full market coverage of the nation’s FMCG wholesalers.”

And investors are convinced by the stunning growth that GudangAda is touting. “Look at the number of wholesalers and retailers already on the platform. Look at the amount of GMV they process. Look at how little time they took to get here. Nobody even comes close. That’s why it’s so hard to replicate,” says Paul Santos, managing partner of Wavemaker Partners.

However, a GudangAda business development executive tasked with acquiring wholesalers and big retailers in a third-tier city in Indonesia tells Tech in Asia on the condition of anonymity that his team has acquired only less than half of the wholesalers in his area. “There are still many stores that we have to onboard,” he says.

We also approached the owners or senior employees of 8 big retailers and 5 wholesalers in some parts of the Greater Jakarta Area’s FMCG sector. None of them have used the app and 10 of them haven’t heard of it. 

Tech in Asia reached out to GudangAda multiple times for this story, which took close to a month to complete. Following an hour-long phone interview and two follow-up queries totaling over 25 questions (which we received answers for), we sent another list of questions, this time focusing on the feedback we received from employees and wholesalers.

GudangAda declined to participate further due to the sensitive nature of some of its data, instead saying that the 20,000 figure it has touted refers to the number of “verified registered merchants”. 

After the story was published, a company spokesperson further disputed our results. 

He questioned Tech in Asia’s definitions of wholesalers and retailers, which may not be in line with GudangAda’s, and challenged the seniority of the people we spoke to and whether they truly know about the real situation.

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