HRtech Vara Startup Reportedly Sold At A Loss To Similar Players From India, PagarBook

Vara Technologies, a SaaS startup product developer Bukugaji, was reportedly sold to a similar player from India, PagarBook. According to the news Entrackr, the startup is estimated to be sold at a valuation of $5,6 million, lower than after receiving initial funding of $15,5 million.

The corporate plan carried out by PagarBook has been submitted to the local regulator, the Registrar of Companies (ROC).

Vara's initial product, Bukugaji, offers an employee management system to manage schedules, record attendance, manage attendance data, print automatic salary slips, and recap employee reimbursements. It is claimed that the Bukugaji solution has been used by more than 100 thousand MSMEs without being charged.

The solution is based on the process of managing personnel among MSMEs, which is mostly done manually. Meanwhile, HR software on the market is relatively expensive and more complex.

This startup was founded by Vidush Mahansaria and Abhinav Karale since November 2020. They also participated in the Surge acceleration program. cohort fifth. Both Vara and PagarBook are alumni of Surge. By July 2021, Vara had pocketed an early-stage funding of $4,8 million from venture capitalists, including Go-Ventures, RTP Global, Alpha JWC Ventures, Surge, FEBE Ventures, and Taurus Ventures.

There are no updates on Bukugaji's social media accounts and apps on Google Play this year. Bukugaji's Instagram was last updated on December 1, 2021, while the application was on November 16, 2021. The Bukugaji website is currently inaccessible.

Difficult to compete

While it is difficult to predict what the competition will be like in the future, it is worth noting that employee management systems are a vicious market with hundreds of players, big and small. Due to the nature of the business, it is difficult for new entrants to seize the market share. For client companies, changing services too often is a very risky choice.

In India alone, services such as Vara and PagarBook, called OkCredit and Khatabook, must be willing to step back from realizing their ambitions in this sector. One of OkCredit's solutions, OkStaff ceased operations, while Khatabook has closed Pagar Khata for choosing to narrow its focus on bookkeeping and fintech initiatives.

Menurut CB Insights, there are 12 common reasons why a startup shuts down. The highest reason is because of failing to raise new funds (38%), the product is not needed by the market (35%), unable to compete (20%), defective business model (19%), and so on. Vara may be sold at a loss for some of the reasons above.

In Indonesia the situation is not much different. Startup players with new innovations must fight the habits of MSMEs who are used to doing the entire process manually, taking notes in books, using spreadsheet programs, and so on. What Vara offers may not be something that is needed with such a high degree of urgency in the market.

For various business scales, so far there are various startups working on SaaS services for HR management. These include Pegaw.ai, Catapa, Synergo, KaryaOne, Mekari, and so on.

What the Co-founder and CEO of Commerce have to say Ryan Manafe maybe it can give a little picture of the business that captures the MSME market.

In a joint interview DailySocial.id, Ryan explained that startups need to tailor solutions to what their target market really needs. In Dagangan, because the target is grocery stalls in the village, what is most needed is the supply of goods at cheap and varied prices. Meanwhile in the city, because the supply of goods is likely to have been fulfilled, it goes to the next stage, namely bookkeeping.

“So maybe there is a need there [bookkeeping]. But in the village, it's not a matter of price and logistics, but the variety of goods due to their choice of [warung] that's all. Number two is the issue of funding, number three we will see together [what the future looks like], we want to solve the problems that are in front of our eyes,” said Ryan.