Monk's Hill Ventures leads US$11.5m Series A round for Indonesia's DAGANGAN

INDONESIA social e-commerce platform DAGANGAN has raised US$11.5 million in a Series A funding round led by Monk's Hill Ventures. Other investors include MMS Group, K3 Ventures, Spiral Ventures, and PnP.

Founded in 2019, DAGANGAN, which means "trading" in Bahasa Indonesia, supplies fast-moving consumer goods (FMCG) to underserved rural communities through its Android app and partnerships with community leaders.

The startup will use the funds to grow its house brand of white-label products, including frozen foods, groceries and homeware appliances, it said in a press statement on Tuesday.

It will also go into product development, expanding digital product features such as pay-later services, logistics pickup and delivery, talent acquisition and growing partnerships.

DAGANGAN plans to expand its footprint in tier-3 cities and tier-4 villages, including Java, Sumatra, and Kalimantan. It has a presence in eight tier-3 cities and 5,000 tier-4 villages in over 50 regencies.

It uses a tech-enabled "hub-and-spoke" approach to reach out to key opinion leaders (KOLs) like village chiefs, microentrepreneurs, or community heads in key areas. These KOLs will cultivate group orders, which DAGANGAN will fulfil by working with FMCG producers and wholesalers or warung owners (shop owners).

Through partnerships with local farmers, DAGANGAN also produces private-labelled products such as groceries. It said it has distributed over 20 local products from smaller farmers and distributors to a broader market.

Its group-buying model consolidates demand based on location, which reduces the cost of the supply chain by 95 per cent as compared to other supply chain suppliers in Indonesia, the company said.

Rural communities in Indonesia comprise 80 per cent of the population and are currently underserved, DAGANGAN said.