BukuKas co-founder and CEO, Krishnan M. Menon, has been working with Indonesia’s small-scale merchants since 2013. Before establishing BukuKas, he oversaw merchandise acquisition and sales for Lazada in Indonesia, which connected him with many of the country’s mom-and-pop retailers. “I’ve always been dealing with small businesses. They could be my suppliers, my marketplace vendors,” Menon told KrASIA in a recent interview.
It wasn’t long before he started his own business—furniture e-commerce platform Fabelio—bringing him into even closer contact with SMEs in Indonesia. He often drove to Jepara, Solo, and Semarang—cities full of small-scale furniture manufacturers. Menon quickly noticed a large digital divide between merchants in Jakarta and their counterparts in other cities.
Jakarta, Menon said, is like a bubble that doesn’t reflect the “real Indonesia.” In the capital, it’s common to see businesses, even smaller ones, utilizing digital tools to streamline their operations, but leave the capital to head in any direction, and you’ll find that merchants are still operating as they were decades ago. Sales and purchases are logged by hand in a ledger, for instance.
“There’s no technology in their business. It’s still pen and paper, they are still doing mental math and getting it wrong, and they forget to collect payments from their customers,” Menon said about some of the small merchants he met outside Jakarta.
Those errors, the serial entrepreneur thought, could be avoided if traders used a tool that was already in their pockets—their smartphones. A little bit of automation could give them a clean, organized set of books. Soon, he set out to build an app that helps SME merchants record their transactions in a simpler way. Apart from eliminating lapses in bookkeeping, part of the idea was to give these business owners the space to focus on scaling up their businesses.
After leaving Fabelio in mid-2019, Menon took this idea to Lorenzo Peracchione, his former boss at Lazada. The concept immediately clicked, as Peracchione recalled similar problems at his father’s farm in Italy. In December 2019, BukuKas went online in Indonesia.
The Android-based app offers free accounting services for SME merchants to monitor sales, profits, and credit. It also sends payment reminders via WhatsApp to the merchants’ customers. In just six months, BukuKas amassed nearly 300,000 users, with around 80% of them from outside Jakarta.
That momentum has attracted the interest of investors. In April, BukuKas received an undisclosed amount of seed funding from Sequoia India’s accelerator program Surge, Credit Saison, Hustle Fund, Whiteboard Capital, 500 Startups, and a number of angel investors.
Keeping it simple
Services like those offered by BukuKas could make a huge impact. Indonesia’s SMEs contribute to 60.3% of the country’s GDP and employ 97% of its workforce, according to Indonesia’s central bank. According to a report from the Ministry of Communication and Information Technology, out of the country’s 59.2 million SMEs, only 8% have adopted services like online order forms, built e-commerce storefronts, or use SaaS products.
The reason why many Indonesian SMEs’ business practices aren’t moving forward, according to Menon, is that many proprietors have a fear of “complicated” products. “Take any famous accounting software, it has all these big words, which most people don’t understand, and they get scared when they see all of that,” he said. What Menon had in mind for BukuKas was something that was more straightforward, with a clean interface and intuitive functionality.
The cash management service that BukuKas offers is framed exactly in that manner. Menon and his team basically turned physical ledgers into a smartphone app, incorporating some automatic calculation functions for income and expenses, debt and credit records, and multibook accounting. The app is easy to use, and merchants can spend less time performing upkeep. Compared to the apps made by competitors like Moka and Jurnal, BukuKas, whose name literally means “cash book” in Indonesian, has a much cleaner interface and is more user-friendly for small business owners.
Other than its simplicity, BukuKas’ strength lies in the free services that are offered, such as a digital business card generator and automated debt payment reminders, Menon said. “In Indonesia, we notice people don’t like to ask someone for money. When they have this automated [WhatsApp-based] way of asking, they feel less shy and that helps them a lot to keep track of who owes them money.”
Menon claims that BukuKas helps its users trim off about 40 minutes each day from tasks related to bookkeeping.
BukuKas’ competitors make money by charging subscription fees for their services, but Menon hasn’t done the same. “We built a very simple product that is very useful for a lot of merchants, and this is the core focus that we don’t intend to monetize. In the long run, of course, we have a very clear plan,” he added.
Menon did not say how BukuKas generates revenue now, but he did mention that the company’s seed funding is keeping the lights on. Even the pandemic has not had an impact on the firm’s financials, he said.
Menon has plans to reshape the cash management app into a platform that connects business owners with each other, with functionality that offers assistance with tax payments and applying for loans from banks. These services might be BukuKas’ source of income in the future.
In 2020, one of the company’s main objectives is to help its clients weather the pandemic. BukuKas has been assisting them with going online and selling their merchandise through e-commerce platforms, and plans to enable offline access to its app starting this week. The firm also aims to grow its user numbers at least threefold.
As has been the case for many other platforms, there has been an uptick in BukuKas’ traffic since COVID-19 took hold in Southeast Asia. There was a 50% bump in weekly sign-ups, and a 40% increase in transaction volume. However, Menon is aware that this may be temporary. “We saw very strong growth, but we have to see how the next few months will be,” he said.
This article is part of KrASIA’s “Startup Stories” series, where the writers of KrASIA speak with founders of tech companies in South and Southeast Asia.