Indonesia's new online furniture retailer Fabelio has successfully raised US$9 million as part of its Series C round, bringing its total funding to over US$20 million. The first close of the round was led by Taiwanese venture firm, AppWorks, Endeavour Catalyst and Telkom Group backed by MDI Ventures. The existing investor Aavishkaar Capital also contributed to the fund.
This round of financing will further accelerate the development of Fabelio's supply chain network of logistics hubs and experience centres to support its domestic expansion into new regions and cities within Indonesia such as Java and Bali by November 2020. As part of this latest round, AppWork’s' partner, Jessica Liu will also be joining Fabelio's board of directors.
In a statement to Marketing, the spokesperson said Fabelio spends about 10% of its revenues on marketing, and that the marketing budget was not strictly pegged to the funds raised. Currently the marketing team of 35 is led by the company’s chief marketing officer, Arie Wisnu Pradono, with plans to open up 10 new showrooms and experience centres in 2020 and cover the whole island of Java by year end. To date, Fabelio has experienced 82% year-on-year growth in customer acquisition, with more than 1,000 B2B projects ranging from residential properties such as houses and apartments, offices to retail brands such as Citraland, BRI and Jakarta MRT. Its product shipments have now reached more than 750 sub-districts throughout Java, where its unit economics have been positive since late 2017 and are on track to target profitability by 2022, according to the press release.
Previously, its Series B round raised US$6.5 million in 2018, kickstarting Fabelio’s exponential growth in Indonesia, with three domestic offices and 20 experience centres in places including Jabodetabek and Bandung, with a headcount of 430 staff. In a statement to Marketing, it was mentioned that with the pandemic forcing Fabelio's local showrooms to close, the company overcame the challenge of providing a custom and personalised experience to customers through a virtual assistant, live chats with service staff and adopting mobile platforms such as WhatsApp.
Marshall Tegar Utoyo, CEO and co-founder at Fabelio said the company was ready to accelerate its growth with this Series C round after five years of scaling up and defining the fundamentals of its “new retail” strategy. He added that the company’s main focus would be to improve its product categories and delivery time, as well as expand its sphere to influence across Indonesia by opening new warehouses and experience centres in new cities.
He also added that with more US and Chinese companies setting up operations in Indonesia, more opportunities opened up for global trade and manufacturing for Fabelio. “These market trends, combined with their efforts will enable us to win a larger market share in this exciting US$6.7 billion home furniture market in Indonesia”, Utoyo added.
Christian Sutardi, co-founder at Fabelio said the last few years made the trend clear that the contribution of online sales had been increasing in Indonesia in every sector, be it electronics, fashion, groceries or furniture, and COVID-19 had “massively accelerated” the trend. He further said the company recorded its “highest online sales ever with figures surpassing those experienced during Indonesia's number one online shopping day Harbolnas on 12 December” in April.
"Our end-goal was always to provide a better customer experience. In the two years, we see ourselves as a home and living destination that can provide our customers with all products and services related to their furnishing and interior needs. A significant portion of the funding will be invested in technology, which includes scaling up our current team of 40 engineers," Sutardi added.
Meanwhile, Liu said Fabelio was building a locally relevant furniture brand for a generation of digitally native Indonesians, and that “in just five years, the company had introduced world-class furniture products” that had been adopted by a growing segment of Indonesians and businesses.
“Fabelio’s customer-first value shapes a better shopping experience and becomes a category-transforming business. We are excited to join Fabelio on its mission to shape the future of Indonesian's furniture industry," Liu added.
Winston Adi, head of investments at MDI Ventures said the company was “delighted to be part of Fabelio and its stellar leadership team”, adding that as businesses turned digital, it was very important to “blur the lines between physical and digital, maintain efficiency with data, and tackle the relevant market” with a highly scalable business model to gain the market lead.
“Fabelio is set in a unique position to check all the boxes as the perfect example to create a digital innovation in the retail industry. We believe with this investment, Fabelio will be able to tap on more business and consumers and have its furniture reachable to every household and business across local and regional markets. MDI will provide continuous support as it continues to bring innovative solutions to the market and execute its long term vision,” Adi added.
EN Venkat, partner at Aavishkaar Capital said Fabelio had “deep networks with artisans and manufacturers from local furniture-making centres” in Indonesia, and that its “tremendous effort in empowering Indonesian Micro-Small Medium Enterprises (MSMEs) was the inspiration behind Aavishkaar Capital’s involvement in Fabelio’s exciting omnichannel furniture business”. “We look forward to our continued involvement with Fabelio,” he added.
Fabelio's primary focus for 2020 will be increasing market share through the hiring of key engineering talent, continued online marketing efforts, product development and operational improvements. It is also actively seeking regional investors in Southeast Asia and China to conclude its Series C round by end-2020.
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