Quona Capital, B Capital lead Series A round in Indonesian startup Ula

Ula, a marketplace platform that focuses on modernising distribution and credit in traditional retail, has raised $20 million (Rs 145 crore) in its Series A round of funding led by Quona Capital and B Capital Group.

Existing investors Sequoia and Lightspeed also participated in this round.

Ula will utilise the capital to grow its geographical footprint, expand suite of products and services and move into new categories

“Small stores are micro-entrepreneurs in Indonesia with highly cost-efficient operations compared to modern retail counterparts. However, their small scale, limited upstream product availability, high prices, poor service and limited working capital makes them the most vulnerable segment of the retail value chain. We take a retailer-first approach to address these pain points,” said Nipun Mehra, CEO at  Ula.

Ula was founded by Mehra, Alan Wong, Derry Sakti and Riky Tenggara in January last year. The company says it operates as a multi-category wholesale marketplace that aims to help small store owners access product selections, prices and working capital to increase their incomes.

"Indonesia's retail spend is expected to surpass $0.5 trillion over the next 4 years driven by millions of small retail stores. Ula is at the forefront of transforming Indonesia's SME supply chain by democratising access to merchandise and driving financial inclusion through technology,” said Kabir Narang, founding general partner at B Capital Group.

The startup claims that it has seen over 10x growth in its business since launch, with returning customers purchasing up to two to three times their original volumes. Ula had raised $10.5 million in its seed round of funding in June last year.

New investors

Quona Capital says it makes financial-technology-based bets that advance inclusion, with a focus on emerging markets. It also has a tie-up with non-profit organisation Accion, which it was a part of before becoming an independent firm in 2015.

In December last year, the VC fund backed Arya Collateral Warehousing Services Pvt. Ltd, an agricultural-technology startup focused on the post-harvest phase.

In March, Quona Capital marked the final close of its second VC fund – the Accion Quona Inclusion Fund – at $203 million. The vehicle had an initial target corpus of $150 million. Apart from Accion, International Finance Corporation had proposed to contribute $12 million to this fund.

Other companies in the firm’s portfolio include CreditMantri, Fisdom and ZestMoney.

B Capital was founded by Raj Ganguly and Facebook co-founder Eduardo Saverin in 2014. It invests in business-to-business (B2B) and business-to-business-to-consumer companies in the enterprise technology segments. It also invests in fintech, health-tech, consumer enablement technology, and transportation and logistics.

The firm typically invests between $10 million and $60 million in companies at Series B, C and D stages. It has invested in around 30 companies in Europe, the US and Asia, including India. It also closed its second global fund last year after raising $820 million to invest in growth-stage ventures.

In India, B Capital’s latest investment was Khatabook Inc, an SME-focused financial-technology firm. 

B Capital has invested in three other companies in India, according to VCCEdge, the research arm of Mosaic Digital. These are logistics startup BlackBuck, scooter and bike-sharing venture Bounce and Bizongo, a B2B marketplace for packaging materials.