StoreHub announced today that it has raised US$13.5 million (RM60.7 million) in its pre-Series B round. The investment was led by venture capital firm 500 Global, along with participation from existing investors Vertex Ventures Southeast Asia & India, OSK Ventures, and others.
This round comes after its Series A+ Round in 2020 when it had raised US$8.9 million. This pre-Series B round brings their total funding to US$28.5 million.
In an interview with Vulcan Post, Wai Hong Fong, co-founder and chieftain of StoreHub, said that the new funding round will help the company drive further investment into technological innovation while deepening the value and quality of StoreHub’s services.
To empower merchants sustainably
According to Wai Hong, the fresh funds will be used to continue scaling the number of stores that use StoreHub, but “in a sustainable and healthy way”.
“Positive unit economics has always been a key feature of our scaling engine and we want to continue to grow in this manner,” the co-founder explained.
As mentioned, the company will also be investing in technology innovation to meet the challenges of retailers and restaurants in this post-pandemic landscape.
“We’ve seen how painful the market and operational changes are that businesses need to work through, and we want to ensure that we can empower and support them in an even bigger way,” he explained.
The press release also states that the team is taking “revenge travel” and “revenge dining”into consideration, believing these post-pandemic tendencies will continue to drive consumer behavior in Malaysia and across the region.
With this in mind, Wai Hong in the press release said retail and F&B business owners are looking for ways to improve operational efficiency and maximise their revenue per customer. These are things he believes StoreHub’s platform can help achieve.
Amidst the pandemic, however, StoreHub has continued to grow. In the last 12 months, StoreHub stated that it has processed over 128 million transactions worth over RM7.2 billion in gross transaction volume, showing a 40% increase from the previous year.
Matching this increased demand, StoreHub has been expanding its team, bringing in over 100 new hires in the last six months.
To Wai Hong, this growth in the volume of transactions is a natural result of the team’s consistent growth in empowering its merchants.
“Our team has also evolved constantly to build improved processes and scalable systems to ensure that our merchants have a smooth experience with the product and our service,” he said.
According to a press release, 500 Global’s managing partner, Khailee Ng, shared that StoreHub’s round is one of the first of many “really big bets” the firm is taking in its top-performing companies.
Khailee further explained to Vulcan Post that this was because StoreHub is “Southeast Asia’s only multi-country player, with the most paying customers, and the most VC backing”, putting them in a great position to build a regional giant.
Khailee also said that StoreHub is creating a playbook for the rest of the world. To him, signing up and retaining thousands of paying customers in the Philippines and Thailand is different from doing so in the US.
“More emerging markets will benefit from the lessons StoreHub has learned, which also paves the way for StoreHub’s future market entries,” he said.
A prelude for future plans
According to StoreHub, that it has reached close to net profitability a few times over the years, with the latest being in December 2021.
“Every time we’ve raised a round, we would build a financial plan that aims to reach net profitability within an 18 to 24-month timeframe,” Wai Hong shared.
But StoreHub typically ends up raising a new round before reaching the end of those cycles due to investor confidence and the company’s hunger to keep growing.
“We will continue to adopt a similar approach with this round,” Wai Hong said.
According to the chieftain, this pre-Series B round is a prelude to its Series B round that they already have planned.
Before then, Wai Hong said that we can expect to see greater depth in how the company enables merchants to operate more efficiently and sophisticatedly.
Given the exponential growth in the size of cheques StoreHub has been given, this Malaysian startup is something we’ll be continuing to keep our eyes on.
Featured Image Credit: StoreHub