The MSME’s digitization is a big topic that has been widely discussed throughout this pandemic, as this sector is considered most affected and in urgent need of digital solutions to survive. At the same time, a great potential lies in this sector. Therefore, in the past year, new players have emerged and succeeded in attracting investors to channel their funds.
One of the startups with an exponential growth is BukuKas. Within two years, the startup which focuses on developing applications for financial records for MSMEs, has successfully closed a series B funding round of $50 million (more than 727 million Rupiah). This is quite a large nominal for series B funding which usually starts from $30 million to $60 million.
What really makes this MSME financial recording business so sexy in the eyes of investors? And how can BukuKas’ growth hacking strategy close the Series B round within just two years? Regarding this matter, #SelasaStartup invited the Co-Founder and CEO of BukuKas Krishnan Menon.
Product market fit first
BukuKas product is actually very simple, financial records for MSMEs. However, in order to get into today’s products, companies have to do research many times, observe trends in the industry and ask user’s feedback. In the first three months of BukuKas, the company invested a lot in product market fit.
After all, product market fit is a neverending process as there will always new innovations. Therefore, it takes passionate people for early team, having deep experience in the industry, and directing all available energy to achieve a good product.
“Because creating a product that is easy to use is not an easy process. It can be proven from our application usage in the industry as we see what the market needs,” Menon said.
The initial team was built with solidity and dedication. Menon suggested giving them company shares, therfore, they have a sense of ownership instead of just paying them, especially if the company can’t provide high salary.
This condition is to overcome the retention of quality employees, especially the supply of quality talent is limited. “Give them sense of company ownership, that’s our way of getting good employees at the seed stage.”
Create an interactive pitch deck
Making a deck is a bit tricky because it has to summarize information about the company, business plan, and potential market. Menon recommends decks should be no longer than 15 pages to keep the duration short. If it’s possible, always prioritize graphics with a minimum text to make it more interactive.
“The basic mistake of founders is making textbook-like decks. Aim for minimal text, maximizing graphics and no more than 15 slides.”
He also suggested to create company’s deck that can be compared with other similar companies, therefore, investors won’t have to read all the pages. This method is proven to reduce time and attract more investors.
In addition, to practice smooth presentation, before going to a VC with larger funds, it’s better to get into an angel investor first. Menon thought angel investors is a good start because they generally provide a lot of useful advice for founders.
“They can also provide new connections to founders, making it suitable for founders with minimal connections to broaden network.”
Fundraising starts now
Menon continued that fundraising needs to start now, because this pandemic is proving that digital is the future way of working. Therefore, founders should have a nominal projection for 18 months runway. The fund must have a clear and detailed business plan.
The assumption that the early-stage investors investing in founders, according to Menon, is completely true. That anyone could actually make the same product. The difference is how to take the opportunity by offering a solution, whether real or not.
“We have no specific strategy to get the seed investment. We’re just being ourselves, being honest, and mission driven.”
Menon believes that large capital will double up the probability of a company to become a market leader. However, he did not agree on capital being the main factor. In fact, there are many other thingsthat can be of support.
–
Original article is in Indonesian, translated by Kristin Siagian
