aCommerce aims to pocket $30M series B for ecommerce logistics battle

After breaking records for a series A round in Southeast Asia, ecommerce logistics startup aCommerce is gearing up for a new milestone. The targeted deal size for the series B is US$30 million, group CEO Paul Srivorakul tells Tech in Asia.

“We’re getting good interest from investors due to the strong team, [the] market opportunity, [our] ‘arms dealer’ business model, and the size of the funding round. US$30 million is a big enough size for private equity guys and attractive to a variety of venture capital firms,” Paul says.

The Thailand-based startup nabbed US$10.7 million for series A followed by a bridge round of US$5 million.

“Indonesia recently became aCommerce’s biggest regional operation, this month hitting 360 employees,” Paul says. He also hinted at further expansion in the country in the form of warehouses and an office space, depending on client needs.

Paul Srivorakul (standing up), co-founder and CEO of aCommerce Group and co-founder and executive chairman of Ardent Capital, at the Asia Leaders Summit in 2014

aCommerce has been able to secure some of Indonesia’s hottest ecommerce brands as clients. Next to MatahariMall, which launched in August, aCommerce is also the fulfillment partner for MAPeMall (the ecommerce arm of Indonesia’s largest retailer, Mitra Adiperkasa), online fashion store Berrybenka, and several other brands like HP and L’Oreal.

Ecommerce automation

The startup offers end-to-end services for ecommerce clients. It doesn’t only handle warehousing and fulfillment – if necessary, it can assist the retailer in customer service, marketing, and building custom tech solutions. It comes as ecommerce booms across Southeast Asia. A 2013 study estimated the retail ecommerce market size in the top 6 ASEAN countries to be worth US$7 billion, while online sales still only represent less than one percent of the total retail market.

Traditional retailers often choose to partner with companies like aCommerce because of complexities they face as they migrate their businesses online. Ecommerce sales opportunities are abundant but tricky, and retailers need to be aware of and manage multiple channels. At the same time, customer expectations are on the rise, creating demand for same-day deliveries and real-time support.

aCommerce’s software solutions allow it to automate and optimize aspects of these processes. According to Snorre Larstad, who recently joined aCommerce Indonesia as its new CEO, the firm can even help clients make decisions on things like pricing and promotions, and help with fraud detection.

The service also helps with cash-on-delivery (COD) payments. Though COD carries risk for the retailer and delivery company, Snorre believes it’s necessary to offer COD in Indonesia because buyers don’t trust online payments yet, and credit card penetration is low.

Snorre Larstad, aCommerce Indonesia’s recently appointed CEO

“Latest research shows credit card penetration at 3.2 percent of the 250 million population,” he says. “We expect that offering COD is going to be a precondition for future growth of ecommerce, and thereby our business volume, at least for the next two years.”

No consolidation in sight

Being an “arms dealer” in the growing online retail industry holds promise, but also requires patience, since growth is tied to the pace of the industry as a whole. That’s why it’s no surprise aCommerce plans to fill up its own war chest with a new round of funding.