Mbiz Revises New Fundraising Targets and Business Performance

Platform e-procurement for B2B, Mbiz, revise new fundraising series B originally targeted at $20 million to $10 million. The company estimates that it will be able to pocket the new funding by the end of this year.

Mbiz CEO Rizal Paramarta revealed that this new fundraising revision was caused by the Covid-19 pandemic since the last five months. Social distancing policies limit the company's efforts to find new investors.

"We had to hold first because it was unrealistic considering the situation. So, our plan is to close the funding--a kind of mini-series B--by lowering the ticket sizes This year. However, the funds aresplit $10 million each for 2020 and 2021," he was contacted DailySocial.

Lastly, Mbiz got series A investasi investment from Tokyo Century Corporation in 2017. "For now, we've been there bridge financing, so it can still run until next year," he added.

If you look at the current situation, Rizal said, most likely only local investors will participate in this new funding. However, it does not rule out the possibility of seeking foreign investors as long as they have Presence in the Indonesian market.

"Group we are investors who do not have Presence here because it will be difficult due dilligence-his. Unless, they (investors) just want to go, for example one anchor from local, the rest follow," he explained.

Furthermore, this funding is planned to be used as a operational expenses (OPEX). Some of them are for HR expansion needs, expansion outside Jakarta and new market segments under large corporation, and platform development.

B2B down, starting priority to B2G segment

In addition to fundraising, Mbiz also revised its business growth target this year. "We had to revise our growth target to core business we have doubled," said Rizal.

In the beginning, Mbiz aimed to quadruple growth mainly driven by business e-procurement B2B. Due to the pandemic, many corporations in Indonesia have had to hold back and cut their budgets. As a result, Mbiz experienced a decrease in transaction volume in the first two months when it was implemented social distancing. 

However, Rizal revealed that Mbiz's procurement business began to increase again since June because it was helped by procurement in the Business-to-Government (B2G) segment. According to him, this increase was driven by digital acceleration in a number of provincial governments (provincial governments).

This phenomenon is also driven by Presidential Regulation Number 16 of 2018, the government must procure goods and services through digital.

"Last year, we had sign with the West Java Provincial Government. Next, we have sign with the Bali Provincial Government. In the near future, we will sign with East Java and Central Java. [Deal ] this is big enough for us and helps topline us as a whole. Moreover, this isdrive regulations so that the positive impact is fast on our business," he explained.

Although B2B performance growth is currently still in the recovery phase, Rizal estimates that business e-procurement in this segment will skyrocket again in the fourth quarter. According to him, corporations usually spend their budget during that period.

In the long term, he also predicts that the Covid-19 pandemic will bring a positive trend towards the acceleration of digital transformation in Indonesia, both in the corporate and government segments. Moreover, President Joko Widodo has just budgeted Rp700 trillion for Indonesia's economic recovery.

"tipping point happened in the government. This will lead to core market we're at B2B. If digital adoption is already happening in the government, it will be easier convince-his. We hope this situation can be pushed tipping points in the private sector to use our platform," he said.

He also sees this situation as an opportunity to encourage new user acquisition and ecosystem expansion from vendors that are widely used by the government.

By looking at the current situation and opportunities, Rizal ensures that Mbiz will prioritize the growth of the B2G segment next year, especially for the Java and Bali markets.