Lummo starts generating revenue in FYE 2022, but losses widen

Lummo, an Indonesia-based startup targeting SMEs, has laid off hundreds of employees due to the global economic downturn this year.

Amid uncertain economic conditions, the job cuts were an understandable move from the company, which was founded in 2019 and backed by Tiger Global and Sequoia Capital.

Lummo recorded a loss of US$31 million for the financial year ending (FYE) March 31, 2022 – almost 4x from the previous year, according to its financial statements.

On a positive note, the company began to generate US$2 million in revenue during this period. Lummo did not report any revenue in the previous two years.

CEO and co-founder Krishnan Menon credits the company’s efforts to monetize its services in FY 2022 for this development.

Lummo has two main products: BukuKas, a bookkeeping app, and LummoShop, an ecommerce enabler that was previously called Tokko. The revenue appears to come from LummoShop’s subscription services, as BukuKas has not charged for its services to date.

A long-term game

The widening losses can be attributed to the sizable increase in Lummo’s selling and operating expenses between 2021 and 2022.

Selling expenses tripled to US$17 million in FYE 2022 compared to the previous year, while operating expenses jumped almost 6x to US$16 million. Menon told Tech in Asia that the expenses “were primarily on growing the user base of merchants,” but he did not go into details.

According to the BukuKas website, more than 5 million SMEs across Indonesia have been using the bookkeeping service. Meanwhile, more than 2.5 million merchants were using LummoShop by the end of 2021.

“Growing the team size also contributed to costs,” Menon adds.

The company’s employment-related costs are indeed on the rise. In FYE 2021, the firm only paid US$1 million for staff, including wages, salaries, bonuses, and directors’ remuneration. But that figure surged to US$9 million in FYE 2022.

Lummo founders Krishnan Menon (left) and Lorenzo Peracchione / Photo credit: Lummo

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