Startup raises $2M to boost sari-sari store platform
(From left) Packwork co-founder and CEO Bing Tan, early investors Julian Legazpi and Fern Jacinto, co-founder and chief platform officer Hubert Yap, co-founder and chief marketing officer Ibba Bernardo
MANILA, Philippines –Local technology startup Packworks has raised $2 million (P112 million) from a seed funding round that will allow it to scale up its platform for sari-sari stores and link this fast-growing retailers’ network with relevant financial institutions and brands.
The seed round was led by logistics group Fast Group and global private equity firm CVC Capital Partners, with participation from ADB Ventures, Arise, Techstarts and IdeaSpace Foundation.
“We bootstrapped our way to helping 150,000 sari-sari stores. We’re helping communities all over the Philippines to grow and become more resilient. Imagine how many more we can help with all these awesome partners,” Ibba Bernardo, cofounder and chief marketing officer of Packworks.
Usage of the app increased beyond the founders’ expectations during the pandemic as sari-sari store operators turned to technology to improve operations.
“We have raised funds to help us expand our talent pool and boost our bandwidth to provide more to these store owners. We believe that our product offers and excellent upside,” added Bing Tan, Packwords cofounder and CEO.
More services
Packworks will use the fresh funds to develop The Pack:SuperStore app, expanding its features and improving the user journey. The group also plans to create a department that will directly engage sari-sari stores and provide additional services with partners and build an open platform for financial institutions and brands to connect directly with store owners.
Through the startup’s The Pack:SuperStore app, store owners can process their inventory, bookkeeping and data collection. They can also avail themselves of financial products and order supplies for a lower price without the hassle of coordinating and purchasing new stocks.
The app is designed to be user-friendly and require only low bandwidth and light footprint to ensure accessibility even in remote areas. It also aims to bring down interest cost and boost access to e-payment channels.
“By becoming a fintech (financial technology) enabler, we wanted to address the elephant in the room, which are high interest rates and fees. It’s not only about access, it’s really how do we address the price of poverty in the Philippines,” said Hubert Yap, Packworks cofounder and chief platform officer.
In 2018, Packworks started out as a solution for multinational companies to connect with neighborhood stores.
“We observed that these stores have a hard time tracking their inventories and getting supplies for their stores, especially the ones in the provinces,” Tan said.
Enabling the value chain
From just five sari-sari store partners four years ago, Packworks has since then expanded its network to 150,000. It is targeting to serve 220,000 stores by the end of this year and 500,000 stores by end-2023.
Former Trade Secretary Ramon Lopez, who graced the launch of Packwork’s mobile enterprise resource planning platform on Wednesday, cited the app as a “tremendous” tool that can help microentrepreneurs level up.
“From a sari sari store, they can probably evolve into another business like a food business or a construction retail business — everything retail — everything applying the same technology. The sky’s the limit basically. It opens up many opportunities. And that, to me, is the future of the system,” Lopez said.
Packwork’s goal is to become a platform for other institutions that would like to help the base of the pyramid by enabling the value chain and cutting middleman in the sari-sari store ecosystem.
“We think of ourselves as the railway or expressway infrastructure and not the gas station or fast-food shop operator. We expand partnerships to provide these services to our stores, such as inventory financing, e-payments and microinsurance,” Bernardo said.
