Indonesia’s vast archipelago has long been a problem for logistics companies, but it has no shortage of brave challengers. Jakarta-based Astro, which provides 15-minute grocery deliveries, recently closed a USD 60 million Series B financing round, raising its total funding to USD 90 million since the business launched nine months ago.
Astro’s speed in attracting investment demonstrates the need for a hefty initial investment in building a competitive grocery delivery system, which is about fast logistics infrastructure and locking loyal customers ahead of the competition. Founded by Tokopedia veteran Vincent Tjendra, Astro plans to spend its revenue on user acquisition, product development, and add more staff to its current 200 team. The startup is competing with incumbents like Sayurbox, HappyFresh and TaniHub to win over users. Its customers range from working professionals to young parents at home who seek for convenience in shopping from home.
As in many countries around the world, on-demand delivery received a boost during the COVID-19 pandemic in Indonesia. However, e-grocery penetration in Indonesia remains low and is estimated to be only 0.5% by 2022, compared to China’s 6% and South Korea’s 34% in 2020. That means there’s a huge opportunity for companies like Astro trying to ensure the convenience of ordering food online through physical visits.
Astro offers 15-minute delivery within a range of 2-3 km through its network of rented ‘dark stores’, which are distribution hubs set up for online shopping only. The company has opted for a cash-intensive model, as it owns the entire user journey going from inventory sourcing, supply chain, mid-mile to last-mile delivery. Astro currently operates in around 50 locations across Greater Jakarta, an area with 30 million residents, through a fleet of about 1,000 delivery drivers. Revenues grew more than 10x over the past few months and app downloads hit 1 million.