Large brand distributors dominate the top of the supply chain, but thousands of middlemen, including wholesalers, form partnerships with retailers at the bottom. Baskit, which was founded last year, seeks to give them tools to digitize the management of their goods and services in order to assist them acquire better rates. The Indonesian firm revealed today that it has raised $3.3 million in seed funding from Betatron, Forge, 1982, Investible, DS/X, Orvel, and Michael Sampoerna. This comes three months after a $1.5 million seed round.
Yann Schuermans, the company’s founder, stated that he is a “very big believer in the space.” Supply networks are critical to the economies of every major Southeast Asian economy, accounting for anything from 40% to 50% of GDP. They must eventually modernize and digitize.”
Baskit presently works with around 50 distributors, most of which are based in West Java. Schuermans observed that supply chains in emerging economies are very fragmented, particularly in Indonesia, which has a complex geography comprised of thousands of islands. As a result, a supply chain is more complicated than simply moving items from point A to point B. Middlemen are required, according to Schuermans, because supply chains begin with a producer and distributors, followed by smaller distributors and wholesalers who sell to consumers.
“All of these guys in the middle are so critical with their relationships and connectivity to their communities,” he added. “Their children attend school with the children of shop owners who purchase their product.”
Wholesalers frequently lack brand exclusivity, instead acting more like dealers by purchasing things at higher costs. Instead of attempting to eliminate the role of middlemen in supply chains, Baskit supplies them with multiple levels of tools to help them expand their businesses. This includes software that allows them to digitize their processes and make inventory available online.
Baskit, according to Schuermans, differs from other supply chain startups because they frequently focus on producing ERP software for the higher enterprise segment of supply chains, such as huge brand distributors with tens of millions of dollars in monthly turnover. In contrast, Baskit’s software assists middlemen by organizing their warehouses and inventories, providing visibility into pricing, missing goods, and aging things. The inventory is then linked to an ordering system, allowing clients who previously purchased goods through offline processes to do so online via a catalog.
Baskit also provides customer support to assist distributors in obtaining better items and pricing from manufacturers.
“The best way to describe our business is a hybrid between software digitization partner, but with a very commercial kind of service provider angle where we provide in that respect, we almost look like a marketplace,” said Schuermans. “We help buyers and sellers connect, but it’s a very tightly managed marketplace.” Baskit’s ultimate goal is to make supply chain intermediates more appealing partners to top-tier organizations, such as large manufacturers and brand owners.
“Inventory is the gold standard here because once I have the data, I have pricing information, and I know how much product is available.” I know which things are selling quickly. That is the focal point of our entire stack. Once we have inventory insight, we can do a lot of magic in terms of not just assisting them in selling, but also assisting that wholesaler in optimizing their margins,” he added. This is significant since wholesalers sometimes operate on razor-thin margins of 3% to 7% while also grappling with inflation. Baskit is able to help middlemen get a hold of their inventory by assisting them in deciding which suppliers to purchase from and pricing it right for the customers they are selling items.
Baskit also provides finance to middlemen, who frequently struggle to obtain working cash from traditional financial institutions. It is able to do so because its software includes data on a company’s turnover and how much money is going and coming in. Baskit is now collaborating with various P2P lenders as well as some traditional banks, one of which is on its cap table.
Baskit intends to grow into additional locations, with the objective of obtaining double-digit penetration of the wholesaler base in each, which Schuermans believes will make it a vital player. “This provides us with a very broad distribution because these 50 wholesalers can cover the entire territory, as well as access to a very important supply base, a share of wallet.” It’s fascinating how a small number of suppliers, a small number of wholesalers, can do so much to meet the total demands of the stores they service.”
