Sarees are small convenience stores in the Philippines that often run on pen and paper books. Inspired by a motorcycle trip, Packworks is on a mission to change that, with a mobile enterprise resource planning platform (ERP) that just raised $2 million led by logistics group Fast Group and CVC Capital Partners, with participation from ADB Ventures, Arise, Techstars and Ideaspace Foundation .
The startup will use its new funding to develop its super app, called The Pack, by increasing its platform offerings, including optimizing store operations, including financing access for businesses, and order management across the supply chain. It also plans to build a division that engages sari-sari stores and provides additional services to partners, plus an open platform for financial institutions and brands to interact directly with sari-sari owners.”
Before Packworks started working, it worked with 150,000 sari-sari stores, the company says. It was founded in 2018, with an initial customer base of five sari-sari shopping partners. Packworks now has 150,000 stores on board and aims to have 220,000 stores by the end of 2022 and 500,000 by the end of 2023.
The Pack SuperStore app allows sari sari owners to handle their company’s inventory, accounting and data collection. It also gives access to financial products and ordering deliveries at a lower price. The app is designed to use low bandwidth as store owners often pay higher interest rates and pay more for consumer goods. It also aims to reduce interest charges and handle money through its e-payment features.
Packworks started after founders Hubert Yap, Bing Tan and Ibba Bernando took a motorcycle trip to rural communities. At the time, they came up with the idea of working with saris-sarees after taking a motorcycle trip to bring solar panels to isolated communities. They said they witnessed how saris-saris struggle to keep up with inventory and obtain supplies for their stores, especially in the provinces of the Philippines.
Bernando, Packworks’ chief marketing officer, told londonbusinessblog.com that he and his two co-founders are avid motorcyclists and “while doing our hobby, we also initiate advocacy activities like bringing solar panels to isolated communities.” During their travels, they usually stop at sari-sari shops in the countryside to eat or rest. “We found that these stores are having a hard time keeping up with inventory and getting supplies for their stores, especially those in the provinces.” Then the three thought of creating a one-stop app. “Witnessing first-hand the challenges posed by limited access to sari-sari owners, especially in faraway places, we pledged to share our technical know-how and inspire them to move from analogous processes to using technology,” he added.
The company originally started as a solution for multinational companies to connect to convenience stores. By 2019, it had rolled out nationwide with 220 stores and a valuation of $400,000. After a year, those numbers rose to 27,828 stores with a valuation of $30 million, and last year it reached 130,000 stores with a valuation of $139 million.
He adds that there is not just one kind of sari-sari stores, so Packworks has built a series of apps for different kinds. For the more successful, it has created a full suite of business tools. For new sari sari shops, it has created a beginner friendly app that guides them and connects them with mentor shops. “They can order from our platform,” he said. “Not only that, but they’re actually micro-support groups helping each other out.”
The Pack: SuperStore app gives sari sari owners access to financial products and supplies at a lower price. Bernando says it wants to cut interest costs and transact money by accessing e-payments.
“There are not just one or even two types of sari-sari stores,” he said. “There’s a rainbow of it. We currently work with companies that transport packaged consumer goods and fast-moving consumer goods, but we also work with the carinderia type, or sidewalk restaurants, agri type and rice seller type, among others. It is not about the size, but about the selection of goods. We now have over 150,000 users with an estimated 9,000 SKUs and we aim to reach 220,000 by the end of the year and 550,000 stores by the end of 2023.”
When asked what stage of Packworks’ revenue is, Bernando said: “This year is pivotal for us. We will expand our revenue model from project billing with our partners to performance billing, taking advantage of the transaction value of our 150,000 store network.”
In a prepared statement, Brice Cu, Philippines senior managing director and country head for CVC Capital and board member of Fast Group, said: “At Fast, we are constantly looking for ways to improve our country’s supply chain. The more than a million sari-siar stores in the Philippines are a critical part of this chain and we believe there is a huge opportunity to build a digital layer to connect these stores with customers and suppliers. By linking Packworks’ digital fabric to this network and leveraging the emerging data, there are exciting prospects for creating efficiencies in the supply chain, especially when combined with Fast’s experience and national scale.”