StoreHub, a Malaysia-based platform that enables restaurants and retailers to automate and grow their business, will focus on its existing markets – Malaysia, Philippines and Thailand – as it aims to reach net profitability within 18 to 24 months, its top executive said.

“In terms of markets, we are currently focused on localizing our strategies and fortifying our position in the countries we are already in – Malaysia, Philippines, and Thailand – so that we can empower more SMEs to automate and grow successfully,” StoreHub Chief Executive Officer and Co-Founder Wai Hong Fong told TechNode Global in a recent interview. “Nevertheless, we’re always open to opportunities and conversations on market expansion.”

According to him, since its inception, StoreHub has reached close to net profitability “a few times”.

“Every time we raised a round of funding, we would build a financial plan that is geared towards reaching net profitability within 18 to 24 months. In practice, we usually end up raising a new round before we get to the end of those cycles due to investor confidence in our unit economics as well as our clear drive to keep growing. We expect the next round to be similar,” he shared.

StoreHub announced last month it has raised $13.5 million in a pre-Series B fundraising round led by 500 Global. The round also saw participation from existing investors Vertex Ventures Southeast Asia & India and OSK, among others.

“The fresh funds will be used to continue scaling the number of stores that use our platform but in a sustainable and healthy way. Positive unit economics has always been a key focus of our scaling engine and we want to continue to grow sustainably in this manner,” Fong said, when asked about the firm’s immediate plans after raising the latest funding round.

“We’ve always been very stringent on making sure that any expansion we do is based on solid unit economics, a practice that has allowed us to build a financially healthy company. We’ve learned that expansion into any market would require the right balance of capital, partners, and people that would allow us to keep growing healthily,” he said, adding that StoreHub will also invest further into technology innovation that will address the challenges of retailers and restaurants in the new normal.

Headquartered in Malaysia and co-founded in 2013 by Fong and Congyu Li, StoreHub started as an early pioneer of cloud-based SaaS Point of Sales (POS) systems in the region. The platform currently serves over 15,000 paying retail and restaurant outlets in Malaysia and across Southeast Asia, and has expanded its offering to include QR-based table ordering, loyalty, automated customer engagement, among others.

In the last 12 months, StoreHub said it has processed over 128 Million transactions worth over MYR7.2 billion ($1.58 billion) in gross transaction volume (GTV), a 40 percent increase over the previous year.

In the interview, Fong also shared some of his opinions on issues related to digitization within the F&B industry post-pandemic.

Below is the edited excerpt:

How much should restaurants automate in the ‘Next Normal’? If we compare restaurants before and after the pandemic. How needs have changed? How tech innovation can help solve core problems within the F&B industry?

The pandemic has accelerated digital adoption, especially in Southeast Asia. Inevitably, it has transformed how businesses operate as well as how consumers consume.
On one hand, it has primed consumers to expect digital integration in their daily lives, including dining experiences (for example, digital payment options like e-wallets).
On the other hand, F&B outlet owners are more aware of digitization’s potential to solve core business challenges as many had their first serious touchpoint with it during the pandemic as a means to “stay alive”.

Since COVID-19 pandemic hit, a lot of innovation has happened in the digital space to the extent that we see digitization reaching new heights in being able to solve many core challenges businesses face – including F&B businesses.

For example, there are now tools that let restaurant owners automate SMS marketing at a more affordable rate than engaging a real-life digital marketing expert. To address manpower shortages, there are also solutions that let restaurants automate the whole ordering and payment process – eliminating the need for staff at these touchpoints.

Seeing how readily accessible tech solutions have become and how easily they can help solve many pain points restaurants are facing, F&B owners should automate as much as they can so that they can grow successfully and sustainably in an increasingly competitive landscape.

What is the potential Storehub sees in the automation potential of eateries in Southeast Asia? Where are the opportunities? What are the challenges and how to address them?

As a region, Southeast Asia has always faced more barriers to digitization compared to the West. Cookie-cutter solutions that work in the West may not work here because of how culturally and socially diverse each country is. For example, what works for the Pad Thai stall down an alley in Bangkok may not work for the Mamak restaurants in Malaysia. Weaker currencies against the West also discouraged many from digitizing their eateries before the pandemic.
But since the global lockdown, many eateries have not only realised the tech gap their business had but also changed the F&B landscape in a way where consumers expect some form of digitization in their dining experience.

This sheds light on the massive gap between where eateries are today in the region, and the heights they can reach with automation – to meet the demands of more digitally-savvy customers and at the same time, to remain competitive.

What are StoreHub’s immediate plans after the fundraising? expanding to other markets/countries? introducing more products? How will StoreHub use the funds raised?

The fresh funds will be used to continue scaling the number of stores that use our platform but in a sustainable and healthy way. Positive unit economics has always been a key focus of our scaling engine and we want to continue to grow sustainably in this manner.
We’ve always been very stringent on making sure that any expansion we do is based on solid unit economics, a practice that has allowed us to build a financially healthy company. We’ve learned that expansion into any market would require the right balance of capital, partners, and people that would allow us to keep growing healthily.

In terms of markets, we are currently focused on localizing our strategies and fortifying our position in the countries we are already in – Malaysia, Philippines, and Thailand – so that we can empower more SMEs to automate and grow successfully. Nevertheless, we’re always open to opportunities and conversations on market expansion.

With this funding, we will also be investing further into technology innovation that will address the challenges of retailers and restaurants in the new normal. We’ve seen how painful the market and operational changes are that SMEs need to work through, and we want to ensure that we can empower and support them in an even bigger way.

What is Storehub’s competitive edge against other startups which are providing similar services? How different are Storehub’s products?

While the competition we face in each of the markets we operate in is unique, our edge lies in the innovation of the StoreHub platform, specifically in how it gives power back to SME owners to grow their businesses successfully and sustainably.
It is not just marketing speak when we say we are the “all-in-one platform you need to automate and grow”. Everything you need to run a successful business is integrated meaningfully into our ecosystem – from solutions which automate the ordering and payment process to targeted SMS marketing and real-time customer data reports that can help SME owners make better business decisions. And even now, we are continuously innovating solutions to help retail and F&B businesses face the ever-changing landscape.

Beyond this, we are driven to make life-changing digital solutions like ours accessible to the little guys – in other words, SMEs who are also the backbone of many SEA economies. While you may find cheaper products out there, there are few which deliver as much value as our ecosystem of solutions.

“In 2021, StoreHub reached close to net profitability by growing average customer revenue throughout the pandemic.” Could you share more on financials? (revenue/ revenue growth). Is there any targeted timeline on when StoreHub can reach profitability?

Since our inception, StoreHub has reached close to net profitability a few times. Every time we raised a round of funding, we would build a financial plan that is geared towards reaching net profitability within 18-24 months. In practice, we usually end up raising a new round before we get to the end of those cycles due to investor confidence in our unit economics as well as our clear drive to keep growing. We expect the next round to be similar.

Malaysia’s StoreHub raises $13.5M pre-Series B round led by 500 Global