The Shopify of Indonesia & Later, India
What is Lummo, a company Bezos and Google have invested in.
There is something happening a bit under-the-radar that I think will be significant. The biggest mistake Jeff Bezos likely ever made is how he interacted with Shopify, who grew up to become a rival.
Now he’s investing in the Shopify of Asia, and it’s called Lummo. Indonesian software startup Lummo, formerly known as BukuKas, raised $80 million in a round led by Tiger Global and Sequoia Capital India to expand its business that helps small merchants get online.
I think the business model most resembles Canada’s Shopify. Google parent Alphabet Inc.’s investing arm CapitalG took part in the Series C round in a rare Indonesia deal for the unit. Other investors include London-based Hedosophia and the founder of Lazada, Maximilian Bittner, executives of the Jakarta-based startup said in a video interview. Hedosophia was among investors in a $50 million round in May last year.
Lazada (majority stake owned by Alibaba)
The company has also secured an undisclosed amount from Jeff Bezos as part of the Series C-round. It’s now raised $149 million according to crunchbase. While it’s based in Indonesia, I predict it will become the “Shopify of India”.
How is Lummo Like Shopify
Demand for Lummo’s service -- similar to that of Shopify Inc. -- is rising as small businesses digitize to cater to the millions of shoppers that were driven online after the pandemic closed malls and retail outlets. Southeast Asia added 60 million new digital consumers since the start of the pandemic, research from Google, Temasek and Bain & Co. shows.
Since growth in Indonesia, SE Asia and India and Pakistan is expected to grow the most during the 2025 to 2045 period, this is exceptional timing for the company and the business model.
Lummo helps merchants build retail websites and do digital bookkeeping. Close to seven million small businesses have registered to use its platform since the end of 2019, said Krishnan Menon, founder and chief executive officer.
The startup will use the fresh funds to boost hiring and strengthen its product and technology. It also seeks to expand in Vietnam, Thailand and the Philippines over the next two years.
E-commerce software platforms across Southeast Asia have capitalized on the retail boom to raise funds. A Shopify of Asia could potentially be a major player in the future of new models of how E-commerce could work in population dense and Millennial friendly South and Southeast Asia.
I think it’s somewhat likely that the future is not just Shopee, Lazada and Tokopedia in Indonesia. Even if Shopee and Lazada really are the duopoly for the early 2020s.
Lummo, as a SME enabler really excites me becomes this model empowers small businesses in the economic recovery from the pandemic. While it’s still early days, it’s really a company I’ll be watching in the E-commerce space very closely.
Lummo In a Nutshell
Indonesia-based Lummo offers e-commerce enablement solutions and a bookkeeping app for SMEs.
Lummo’s annualized bookkeeping transaction volume currently stands at $25.9B, and its gross merchandise value (GMV) grew 11x in 2021.
The company had onboarded 6.3M businesses and attained 3M monthly active users as of May 2021. The company aims to onboard 20M SMEs by the end of 2022.
The startup is supported by a team of 300 employees across its offices in Indonesia and India.
The Race to be Asia’s Merchant Operating System (MOS)
With the big words Shopify has created, Asia will give the world likely the biggest E-commerce operating system sometimes in the . 2030s. There’s some chance it could be Lummo.
Small and medium-sized businesses (SMBs) are the engine of economies around the world and nowhere will this be more true than Asia in the 21st century just as we saw this happen in China in the early 2010s.
Globally startups have zeroed in on SMBs, particularly small merchants and retail stores as a rich segment to target to roll out technology products for. This also intersects well with streaming, influence marketing, the creator economy and apps of scale. This would be a pretty good acquisition target for someone like Walmart owned India based Flipkart or ByteDance, who are growing fast in E-commerce.
As for Jeff Bezos the founder and former CEO of Amazon, this is Bezos Expedition’s second investment among Indonesian startups, following its participation in the series B round of B2B ecommerce marketplace Ula.
From the PayPal mafia in the West to the Lazada Mafia of the East, it’s really interesting to see how the same people keep building lucrative companies. Founded in December 2019, Lummo currently has two apps under its umbrella: ecommerce enabler solution LummoShop (previously called Tokko) and bookkeeping app BukuKas.
Lummo is a jewel in the rough of South East Asia’s competitive E-commerce landscape that I think has incredible potential.
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