Kedai Sayur raises US$1.3mil in seed funding

• Round was led by East Ventures
• Has over 2,000 vegetable hawker partners in the Greater Jakarta area

KEDAI Sayur, an Indonesian startup that empowers vegetable hawkers by utilising technology, announced that they have secured US$1.3 million (RM5.44 million) in seed funding led by East Ventures. The investment will accelerate Kedai Sayur’s mission to onboard more vegetable hawkers as their partners.

Kedai Sayur, which translates to “Vegetable Kiosk”, was established in late 2018 to provide vegetable hawkers with the best quality and price of fresh commodities for the products they sell. The company was founded by the former Deputy Director for Business Process and IT of Triputra Group, Adrian Hernanto, along with Ahmad Supriyadi and Rizki Novian.

Fresh commodities like vegetables, fruit, meat, and fish, are consumed daily. In 2017, the total consumption of these fresh commodities in the Greater Jakarta, Bandung, and Surabaya area was estimated to be US$8.4 billion. The sales and distribution of this fresh produce that lasts for less than a week, mostly still relies on traditional distribution networks called ‘tukang sayur’ (vegetable hawkers).

There are two types of vegetable grocer in Indonesia; one is a typical kiosk that provides fresh produce for walk-in customers and another is a hawker who use handcarts and sells their fresh produce door-to-door.

While most customers rely on vegetable hawkers to get their daily fresh produce, hawkers are struggling due to the complexity of getting high-quality yet affordable fresh produce from a single source.

The journey of fresh produce begins with farmers pooling their products for multiple aggregators. Aggregators will then distribute it to several vendors at the central market. At midnight, hawkers buy their supplies from these vendors before re-selling them to customers in residential areas. This long process multiplies product prices, leaving hawkers with low-quality products and low profit margins.

Kedai Sayur tackles this problem by working with several farmers and partners directly for product sourcing and distribution. Vegetable hawkers who join Kedai Sayur as partners (called Mitra Sayur) can access these products through the Kedai Sayur app and pick them up from the nearest drop-off point. Grocers can register themselves as Kedai Sayur’s drop-off points.

Kedai Sayur also offers their partners a new kind of delivery vehicle called “Si Komo” (stands for Kedai on Mobile) that can help them reach customers in a more efficient way. The uniquely designed vehicle can be transformed and utilised for other services such as delivering packages or selling food, allowing them to have additional income other than selling fresh produce. Kedai Sayur also provides a financing programme for partners who have limited capital to purchase these vehicles.

Kedai Sayur chief executive officer Adrian Hernanto said, “For the longest time, many have attempted to fix this problem but are yet to succeed. With our vast network and technology utilisation, we can empower the fresh produce market and prove that the grassroots economy like vegetable hawkers can also feel the benefit of technology inclusion. We trust our mission will improve hawker’s overall life as we free them from working odd hours and open multiple potential revenue streams.”

To date, Kedai Sayur has more than 2,000 vegetable hawkers as partners in the Greater Jakarta area and the number continues to grow by 60% per month. Eighty percent of the partners actively sell their products and the company’s gross merchandise value (GMV) grew by 5x in the last four months.

Willson Cuaca, the managing partner of East Ventures, said, “Door-to-door vegetable hawkers have probably existed for hundreds of years in Indonesia. Surprisingly, they are still available in today’s modern society, standing side-by-side with the fast-growing modern supermarket and convenience store. In fact, the vegetable hawkers are one the most convenient ways to get our daily produce.”

“Kedai Sayur fits into two of East Ventures hypothesis. The first one, technology inclusion to upgrade the underserved merchant accessing technology and second, the improvement of Indonesia’s supply chain. There is local wisdom that helps traditional on-demand vegetable hawkers to exist for so long and we want to preserve that culture with a touch of technology,” he concluded.