Indonesian e-commerce startup Ula came into the limelight in October last year when Amazon’s founder Jeff Bezos’s family office joined its Series B funding round, marking the billionaire’s first-ever investment in Southeast Asia’s e-commerce space.

Ula announced then that it has secured $87 million in Series B funding round co-led by Dutch tech investment firm Prosus Ventures, China-based tech giant Tencent, and US-based investment firm B Capital Group. The trio were also joined by Bezos’s Bezos Expeditions, and Southeast Asian funds Northstar Group, AC Ventures and Citius. Existing investors Lightspeed India, Sequoia India, Quona Capital, and Alter Global also participated in the round.

Ula, which provides technology solutions to small retailers, later secured an additional $23.1 million in funding from Tiger Global in November 2021. Binny Bansal, co-founder of Flipkart, also participated in the round.

The ​​company said then it will continue to invest in geographic, product, and team expansion, with a special focus on supporting underserved retailer communities through technology in Tier 2 to 4 cities.

This includes expanding a Buy-Now-Pay-Later (BNPL) offering, empowering small business owners to sell within their communities, and incorporating advanced technology such as artificial intelligence (AI) to support retailers in improving business management. Ula claimed that since the early days of the pandemic, the company has been developing a range of easy-to-use digital solutions that are helping over 100,000 users – from microentrepreneurs to warung owners – address challenges and create new opportunities to thrive in the digital economy.

Several months after its funding rounds, in an interview with TechNode Global, Ula’s Co-Founder and Chief Technology Officer Alan Wong shared the key barriers of adoption for digital tech in Indonesia outside of big metro areas, Ula’s plans and strategy after securing funding, among other issues.

Below is the edited excerpt of the interview:

What are some of the key barriers to the adoption of digital tech in Indonesia outside of big metro areas? How can Ula help to overcome these challenges?

Most of our customers are traditional retailers in Tier 3 and Tier 4 cities who are not accustomed to using mobile apps for essential purposes including replenishing stocks.

At present, retailers face issues across several key areas. Replenishing inventory is a time-consuming and inefficient process for retailers across the country, with many forced to shut their stores to personally travel to source products.

Opaque pricing and unreliable deliveries mean they have to often haggle to negotiate for better deals, after which their ordered products might not arrive. Finally, a lack of access to traditional banking systems limits their ability to manage cash flow and easy access to working capital.

Ultimately, our end-to-end digital solutions help streamline the retail supply chain network, provide easy credit access to under-banked retailers and empower micro-entrepreneurs in the local community. This allows us to empower retailers to be more productive with their time to focus on growing their business.

How to encourage greater adoption amongst traditional segments like warungs (mom-and-pop stores)?
a. Would you have any numbers/estimation on the number of warungs? How many are there?
b. What kind of opportunities can they provide to Ula?
c. What kind of challenges Ula faces?

While the pandemic has accelerated digitalization, it has also exposed inequalities, especially for micro, small and medium enterprises (MSMEs) that make up 99 percent of existing business and generate more than 60 percent of the country’s Gross Domestic Product (GDP).

Our goal is to help local communities thrive in this digital economy through streamlining the retail supply chain network and providing easy credit access. To encourage the adoption of digital solutions, we’ve designed our apps to have low barriers to entry, from interest-free credit to user-friendly technology. Additionally, we also offer in-app or offline training sessions to familiarize retailers with our app, including community events.

To help them grow their business, we also create tools adapted to their workflows. For example, for Teman Ula (community selling program), we designed a consumer app that the users who buy from the Teman Ulas can use, as well as allowing Teman Ulas to share directly on whatsapp, making life easier for the sellers.

We also strive to remain agile in order to address retailers’ needs and adapt our offerings accordingly. For example, Ula’s Pay-Later function was added in response to what the warungs needed as many of them struggled with lack of access to working capital.

What is the impact of user-friendly technology for driving MSME growth? How Ula and its team of engineers develop their so-called compact, user-friendly app and what has been the consumer feedback towards this?

As most traditional retailers reside in rural areas, they have poor mobile connectivity and use entry-level smartphones. Because of this, we’ve focused on simple but purposeful solutions that add real value and build trust with them.

Our apps are optimized for basic mobile plans, including functioning in areas with limited connectivity and are lightweight enough to download and install, and continue to provide a smooth shopping experience. We also work closely with our customers through in-depth feedback sessions and usability testing to inform new features or refine our outputs respectively.

The impact of user-friendly technology cannot be understated – it has allowed underserved traditional retailers in Indonesia easy access a wide-range of products via our mobile app.

The app is also an e-commerce platform where retailers are enabled to streamline their supply chain processes through delivery services and financing options. In just a little over two years since our launch, we are now serving more than 200,000 customers across Indonesia’s Tier 2 – Tier 4 cities.

Ula raised funds in October and November last year. How much has been deployed? mainly for what purposes? How soon will Ula need to raise funds again?

Having raised a total of $140.6 million in funding over three rounds within a year, it has been exciting for us to see Ula’s mission come to life. We are focused on execution – Ula will continue to invest in serving our customers, with a special focus on supporting underserved retailer communities in Tier 2 – Tier 4 cities through technology.

We will also continue to identify ways by which we can help them manage their businesses better, such as expanding our Buy-Now-Pay-Later (BNPL) services, amongst other things.

How are the new and existing investors helping Ula besides funding? Any collaboration between other portfolio companies? We see names like Tencent, Jeff Bezos’s Bezos Expeditions joining the funding round in October.

We’re thrilled to be working with some very seasoned and reputed investors like Prosus, Tencent and Bezos Expeditions. We’ve been working closely with them, as we benefit greatly from their experience in a wide range of markets.

Any expansion plan into other markets besides Indonesia and why these markets? Or Ula plans to focus on Indonesia first?

Our strategy from the start has always been about steady growth. Our approach has always been to solve the underlying problems of small stores first and getting the basics right – reliable deliveries, wide selection, competitive pricing and offering working capital.

As such, we are now focused on growing Ula’s presence across Indonesia, but we believe our solution is replicable across Southeast Asia, where small retailers are prevalent and experience similar pain points, and will be expanding internationally in the future.

How are the ‘pay later’ options doing? Any plans to expand Ula’s products? Could you provide more details?

The Pay Later option (Ula Tempo) helps retailers better manage their cash flow. Specifically, Ula Tempo leverages the platform’s deep knowledge of customer profiles and behaviors (across more than 50 unique data points) to extend credit appropriately.
This streamlined process allows retailers to be more efficient with their time and focus on growing their business, rather than worrying about cash flow. In addition, we do not charge interest for this offering and allow it to be an additional way for retailers to continue using Ula. Since its launch, and despite a selective roll-out, we’ve seen rapid adoption of this service with customers that stay with Ula for the long term.

Indonesia e-commerce marketplace Ula secures an additional $23.1M in Series B from Tiger Global