If you follow the news of startups in Indonesia, you know that the country estimated at 60 million small businesses are a prime target for technology companies. BukuKas and BukuWarung, for example, have both recently raised significant funds to fuel their race to digitize SME operations. Created in November 2020, Vara focuses specifically on making people management easier for small businesses and their workers, replacing the notebooks or spreadsheets many relied on to track payroll with an app called Bukugaji.
The company today announced that it has raised $ 4.8 million in seed funding from Go Ventures, RTP Global, AlphaJWC, Sequoia Capital India’s Surge, FEBE Ventures and Taurus Ventures. Founded by Vidush Mahansaria and Abhinav Karale, who met while studying at the Wharton School at the University of Pennsylvania, Vara is part of the fifth cohort of startups in the Surge Acceleration Program. He says more than 100,000 small businesses are already using Bukugaji.
The app has features to track attendance, calculate wages and worker loans, and pay payroll. Mahansaria told TechCrunch that Bukugaji is aimed at companies with less than 30 employees. Many of them are in retail, food and beverage, or labor-intensive services like construction and transportation. Bukugaji has functionality for specific employee segments, such as operational staff who typically work in shifts, or permanent staff whose paychecks are set over a specific period of time.
“Before the upload and integration on Bukugaji, the vast majority of our users used laptops to mark attendance and track payroll,” said Mahansaria. “A small party used the note functions on their phones or simple Excel sheets.” Bukugaji is designed to be fully self-service, so businesses can download and start using the app on their own. Its main application is mobile only, but the platform also has a web version.
The businesses served by Bukugaji often have workers who are unbanked, which means they do not have access to a bank account or traditional financial services. Vara’s founders say many of them live paycheck to paycheck, which means they sometimes have to take out loans from their employers.
“Employees often ask their employers for cash advances towards the end of the month when they need the money the most, because sometimes they just can’t make ends meet,” Mahansaria said. “This has two consequences: first, it ties up working capital for the employer. Second, it makes the employee more and more dependent on the employer to meet emergency needs. It is difficult to break out of this cycle given the current limited accessibility to formal financial infrastructure for this market segment.
Earned Wage Access Platforms (EWA) focus on solving this problem by giving employees on-demand access to wages, instead of having to wait for their paycheck. EWA companies are gaining ground around the world, including Wagely and GajiGesa in Indonesia. Vara has no plans to add any EWA functionality to Bukugaji immediately, but it is something the company is considering as part of the value-added services it will integrate with the platform.
“Holding end-to-end payroll and attendance gives us an unprecedented information advantage for this segment of the work,” said Mahansaria, noting that the data can allow companies to add things like benefits that their employees typically do not have access to, and in turn, give workers a digitally verified work history.
In the near future, Bukugaji will add time-saving features such as automated allowances and overtime, dashboard shortcuts, reminders and customizable reports. It also plans to allow employers to pay wages directly through the platform. In the longer term, Bukugaji will offer data analytics to companies and their workers. For example, employees will also be able to see how their income has changed over time. Employers, on the other hand, can spot trends in attendance and wages.
While Vara may eventually expand into the markets, Mahansaria said she is currently “focused on Indonesia”, where SME account for about 60% of the country’s gross domestic product and employs the vast majority of its workforce.