B2B e-commerce marketplace Ula is reportedly on the verge of shutting down its Indonesian office. The news comes after the company experienced a period of “hibernation” in recent months, with its office closure anticipated by the end of this month, according to insights shared with DealStreetAsia by multiple sources familiar with the matter.
Founded in 2019 by CEO Nipun Mehra, Ula has raised over US$141 million since inception. Most notably, the firm had raised US$87 million in a Series B funding round co-led by Prosus Ventures, Tencent and B-Capital in October 2021. Amazon founder Jeff Bezos had also joined the round, marking it his first ever investment in Southeast Asia’s e-commerce space.
Despite this, Ula’s financial performance has been under strain as the company’s losses more than doubled as rising costs outpaced revenue growth for the year ended 31 December 2022.
The company may likely be moving away from its original B2B ecommerce model towards a software-based, asset-light approach, potentially focusing on logistics.
The decision to shift gears stems from challenges including heavy capital expenses and tough economic conditions that prompted Ula to scale back its operations and lay off staff in October last year.
This pivot has led some of Ula’s top executives to seek new opportunities elsewhere as the company explores mergers and acquisitions to support its new direction.
Originally, Ula facilitated the distribution of FMCG goods to small retailers in Indonesia, a model that demanded significant investment in warehouse and inventory management.
Despite previous attempts to diversify its business, including a plan to introduce “Asian Delights,” a service offering food and beverage products from Asia to the US market, Ula has struggled to find a sustainable path forward. This venture, along with other explorations, has failed to materialise due to high capital requirements and competitive pressures.
Neither Ula nor its investors have released an official statement as of now.
Featured image credit: Edited from Freepik
