Indonesia’s Astro raises $60M to work on grocery delivery within 15 minutes – TechCrunch

The vast Indonesian archipelago has long been a source of headaches for logistics companies, but there is no shortage of brave challengers. Jarkata-based Astro, which delivers 15-minute groceries, recently closed a $60 million Series B funding round, bringing its total funding to $90 million since the company launched just nine months ago.

The Series B round was led by Accel, Citius and Tiger Global, with the participation of existing investors AC Ventures, Global Founders Capital, Lightspeed and Sequoia Capital India. The company declined to disclose its post-money valuation.

The speed with which Astro is attracting investment demonstrates the need for significant upfront investment in the grocery delivery race, which is about quickly establishing logistics infrastructure and retaining loyal customers ahead of rivals. Founded by Tokopedia veteran Vincent Tjendra, Astro plans to spend the proceeds of the funding on user acquisition, product development and hiring more staff to expand the current team of 200 people.

As in many countries around the world, on-demand delivery got a boost during the COVID-19 pandemic in Indonesia. But e-grocery penetration in the country remains low and is estimated to be just 0.5% in 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 prove the convenience of online grocery shopping through physical visits. The e-grocery delivery market in Indonesia is expected to reach $6 billion by 2025.

Astro offers 15 minute delivery within a 2-3 km radius through its network of rented ‘dark stores’, which are distribution centers set up for online shopping only. The company has opted for a cash-intensive model because it owns the entire user journey from inventory sourcing, supply chain, mid-mile to last-mile delivery. The advantage of this heavyweight approach is that it can monitor the quality of the customer experience.

Astro currently operates in approximately 50 locations in Greater Jakarta, an area of ​​30 million inhabitants, through a fleet of approximately 1,000 deliverers. Revenue grew more than 10x in recent months and downloads reached 1 million, the company said.

The startup competes with incumbents like Sayurbox, HappyFresh, and TaniHub to win over users. Her clients range from working professionals to young parents at home “seeking convenience,” says Tjendra.

Grocery deliveries are notoriously expensive, but Tjendra expected margins to improve as the company grows. The company’s main source of income is the gross margin it earned from the goods sold and the delivery charges paid by customers. Much of the company’s costs come from delivery, which the founder believed “will decrease over time as we move towards hubs and then narrow delivery distance areas.”

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