This case study of Indonesian MSME financing startup AwanTunai tackles the underlying principles behind how they managed to reduce the impact of the pandemic on their business and actually benefit from the crisis

AwanTunai CEO and co-founder Dino Setiawan receiving an award from the Monetary Authority of Singapore for Singapore Fintech Festival

Elements of Antifragility: A Case Study on Indonesian SME supply chain financing startup AwanTunai 

This case study of Indonesian MSME financing startup AwanTunai tackles the underlying principles behind how they managed to reduce the impact of the pandemic on their business and actually benefit from the crisis


  • While AwanTunai’s business deals with financing and extending lines of credit — a sector badly hit by the pandemic — this same crisis proved to be a source of growth for the company. 
  • The company’s focus on catering to the needs of their ecosystem of suppliers and micro-merchants enabled them to quickly mitigate the risks posed by the pandemic and put them in a good position to be antifragile.  
  • They found growth opportunities for their financing product by extending it to suppliers as well who needed to improve their cash flow as a result of the pandemic.
  • AwanTunai’s growth in 2020 was driven by their continuous cycle of discovering product-market fit, leading to the launch of their online ordering of SKUs and lightweight inventory management services. 

Antifragile is a word used to describe something that “benefits from shocks, they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure , risk, and uncertainty,” according to Nassim Taleb’s book, Antifragile: Things That Gain from Disorder. In the context of a crisis, it is not referring to a business that simply survives a crisis, but a business that grows because of it. 

At the beginning of 2020, Indonesia SME financing startup AwanTunai had just come from a challenging but landmark year with the launch of their flagship financing product, AwanTempo, after two years of experimentation. With the onset of COVID19, the same culture of experimentation that enabled them to find product-market fit with AwanTempo would also be critical in enabling them to ride out the impact of the pandemic on Indonesia’s financing sector and come out stronger as a business. 

When COVID19 eventually hit businesses in Indonesia around Q1 2020, AwanTunai was servicing FMCG supply chains made of principals, distributors, and small mom-and-pop retail shops that were already hit by heated protests in Jakarta and heavy floods in the span of a month. This short case study of the startup the underlying principles behind how they managed to reduce the impact of the pandemic on their business and actually benefit from the situation they were in by strengthening customer relationships, launching new products, and even undertaking market expansion. 

Antifragility: when an emergency turns out to be a saving grace

Antifragility: when an emergency turns out to be a saving grace

A quick of recap of AwanTunai

Though we’ve covered the company many times on Insignia Business Review, if you’re unfamiliar with AwanTunai, here’s a quick refresher: 

AwanTunai is revolutionizing Indonesia’s FMCG supply chain by digitizing wholesaler operations and providing MSMEs or micro-merchants with affordable inventory purchase financing and integrated online ordering. They currently work with regional financial institutions like UOB, OCBC, and JTrust, among others. 

Founded in 2017 by experienced ex-banking, ex-Silicon Valley fintech, and ex-GoJek executives, they began with a goal to provide affordable and sustainable financing to Indonesia’s over 60 million underbanked and unbanked micro-merchants in Indonesia.

By installing POS or EDC hardware into the traditional wholesalers, who traditionally log data with pen and paper, AwanTunai captured very valuable offline transaction data to underwrite purchase financing for the MSME customers of these wholesalers, given inventory is highly correlated with business performance. 

With this proprietary data acquisition model, they launched AwanTempo, their flagship inventory purchase financing product where they could finance purchases of merchants at low-interest rates, while generating good margins for the business and maintaining record-low NPLs (1% 90-DPD to date). This product has been shown to enable merchants to improve business and their cash flow, garnering them multiple awards from the UNCDF, SME Finance Forum, and Monetary Authority of Singapore, and an audience at the UN headquarters in 2019 on financial inclusion in Indonesia

The Power of Three

The foundation of AwanTunai’s business is the tripartite network of AwanTunai, wholesalers/suppliers, and micro-merchants. Attending to immediate the needs of this ecosystem amidst the onset of the pandemic enabled the company to minimize risks of uncertainty on lending.  

AwanTunai worked closely with its FMCG distributors to alleviate their working capital and cash-flow issues while maintaining a best-in-class loan book. Due to the uncertain outlook at the onset of Covid-19, AwanTunai also tightened its underwriting process to minimize potential defaults across its loan portfolio. AwanTunai’s conservative approach to managing risks while ensuring continued funding to creditworthy micro-merchants meant that it received the continued support of its lending partners. 

The closed-loop financing system allowed it to resolve potential loan delinquencies. AwanTunai also worked with suppliers to implement a support program that allows merchants the breathing space to clear out unsold inventories and continue with AwanTempo-financed purchases at a sustainable pace.

AwanTunai's tripartite network

AwanTunai’s tripartite network all aligned towards one goal

Going Upstream

Paying attention to the needs of this ecosystem of suppliers and micro-merchants which AwanTunai brought together also enabled the startup to find a new market segment for their financing product without having to look far: suppliers. 

While AwanTunai’s risk management minimized potential losses and kept micro-merchants afloat amidst the crises, the company also began extending credit lines to their wholesaler suppliers after realizing suppliers in their network were also having cash management difficulties. 

Because of the work they had done with wholesaler suppliers to underwrite purchase financing for micro-merchants via POS data, AwanTunai was in a good position to help these same suppliers with financing as well. And in order to support their expansion into wholesaler supplier financing, AwanTunai raised US$20 million in debt financing by July 2020 in a round led by private debt investor Accial Capital

Apart from supporting the cash flow of suppliers, this initiative also resulted in increased adoption of their micro-merchant services, because in order for suppliers to receive loans both suppliers and micro-merchants had to be transacting SKUs via the AwanTunai app.

While going upstream normally doesn’t bold well in the midst of a storm, this worked to AwanTunai’s favor as it opened up a new but still reliable segment to extend credit to precisely during a time it was difficult to find such customers. 

When the pandemic gives you pain points, turn it into valuable products

When the pandemic gives you pain points, turn it into valuable products

The virtuous cycle of finding PMF

Although AwanTunai found product-market fit with AwanTempo in 2019, the thing with startup growth is that finding PMF is less a single door that has to be opened and more a cycle that the company has to keep on pedalling in order to keep the wheels of the company going. And finding the second product-market fit and the third and the fourth doesn’t get easier. Sometimes however, a crisis could provide that exact opportunity and place the company in prime conditions to discover new pain points or new use cases for growth. That was the case with AwanTunai in the first half of 2020. 

AwanTunai spent early 2020 fast-tracking product development since they wanted to protect their field teams, but still engage the suppliers and micro-merchants they were working with. They launched AwanTunai’s first digital online product by Q2 2020, where micro-merchants could not only avail of AwanTempo, their purchase financing offering but also do cashless payments and online ordering of SKUs (AwanToko). 

COVID19 gave AwanTunai the perfect opportunity to push for full digital operations, where micro-merchants used to face-to-face operations now were incentivized to work-from-home, order their SKUs from the app, pay suppliers cashless, and get their orders delivered to them. Within a week of launching, AwanTunai already saw a full 20% of their transactions going through the automated ordering system

This year they also launched AwanGrosir, their lightweight inventory management, after working more closely with suppliers — which also led to launching their supplier financing — and realizing that suppliers were willing to replace their legacy systems with AwanTunai’s system. With AwanTunai, suppliers could digitally track SKUs and estimate manpower needs, crucial to avoiding losses especially amidst COVID19. 

On our podcast On Call with Insignia back in December 2020, Windy Natriavi, co-founder and Chief Product Officer of AwanTunai, goes more in depth from a product perspective on how they managed to find product-market fit for AwanToko and AwanGrosir. Here’s a snippet from our conversation:

“We ran a lot of experiments, and also faced some difficulties as well. So actually when we started, [AwanTempo] had very low adoption, and then I realized that what does it mean when you have low adoption? And the hard truth was that when you have low adoption, you haven’t done enough work to basically prove that this will actually be a good product.

So in a nutshell, you haven’t done good enough product discovery. You can say, “Oh, it’s because of this PM or that PM, or this designer.” But at the end of the day, you just have to come back to the fact that you don’t have a good product discovery. So then what I started doing was implementing mandatory customer visits once a week for all of our team members in product teams including myself.

Doesn’t matter whether you’re product support, whether you’re a designer, you have to go down to the ground, because You have to interact with the customers. You have to basically get in their head. We even started being concierges, meaning that we asked the suppliers, “Hey, can we actually do what you do? Can we actually receive customers? Can we go to your store? We input and do a transaction.”

And we even deploy things for free and see how people will use it, and not only help people use it but also figure out how fast can we actually use it compared to how fast the suppliers can use it or the suppliers’ current systems basically.

So then this allows us to figure out features such as our lightweight inventory management, which initially no one thought would work. And none of the suppliers actually asked for it. None of the suppliers actually asked for this. And this was really something that I think at that time, people were like, “Are you sure?” 

But then eventually, I was quite bothered by the evidence that one of our PMs gave and he was able to run me through the exact process of what our customers would have to go through, that it just makes sense for us to build a lightweight inventory management system. And now, when we launched that, we showed it to the suppliers and now we have four suppliers that are in the early stages that are basically saying, “You know what, replace all of my legacy systems. I want this.” 

And they did not say that before. That feeling is phenomenal. And I really then understand, what Henry Ford once said, “If you ask customers what they want at that one point in time, they would have said I want faster horses,” but because you’re actually there, and you’ve been in a state of good product discovery, then you’re basically able to say, you know what, maybe this is not what they need and they would want what they need once they see it. And so I think that was risky, but there was a methodical process actually, and the process of developing and rolling out was humbling and phenomenal.”

This continued cycle of product-market fit discovery ties in with the underlying relationships that enabled them to also respond to the immediate impact of the pandemic and then extend their financing offering to suppliers as well. 

Product-Market Fit v1000

Product-Market Fit v1000

The Results

The digitalization of their operations and conservative approach to risk management put them in a good position to expand geographically amidst the pandemic. They spent 2020 onboarding merchants and suppliers beyond the Jakarta Metropolitan Area, covering three regions: Surabaya, Bali, and Lombok. 

And while we’ve trumpeted AwanTunai’s resilience story many times, a lot of organizations agree with us: AwanTunai’s success in tackling new opportunities to support the financial inclusion of merchants and suppliers amidst the pandemic received recognition from various organizations. It was awarded as the top solution for COVID Financial Health Challenge by the UNCDF in September and won gold for Product Innovation of the Year from the IFC-led SME Finance Forum. Finally, the Monetary Authority of Singapore awarded AwanTunai 1st Place for ASEAN Fintech of the Year during the Singapore Fintech Festival 2020.

But ultimately these efforts paid dividends back to the business, immensely growing their monthly disbursements and origination. 

AwanTunai’s measures to mitigate losses and enable new opportunities over 2020 were primarily product-focused and user-focused, from extending financing to suppliers to launching new digital services for micro-merchants and suppliers. In particular, these product developments helped them build more stickiness in their network of micro-merchants and suppliers, which will be important to their business post-COVID. 

More importantly, AwanTunai was able to speed up the digital transformation of the FMCG supply chain across Indonesia, and given that digitalization is a key part of the new normal for business, this will continue to be relevant for Indonesia’s downstream supply chain post-COVID.  

These measures did not only increase their disbursements and enable them to keep their NPLs low but also helped them to raise debt capital and secure an OJK license amidst the impact of the pandemic on the lending and financing sector in Indonesia.

AwanTunai’s story of antifragility this 2020 is built on product and customer obsession, on the digitalization of businesses, and financial inclusion. The measures they undertook did not only allow the business to grow in the way that they did because of the crisis but also helped the micro-merchants and suppliers they serve to become resilient amidst the crisis.

AwanTunai with micro-merchants. From KrAsia:

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Paulo Joquiño is a writer and content producer for tech companies, and co-author of the book Navigating ASEANnovation. He is currently Editor of Insignia Business Review, the official publication of Insignia Ventures Partners, and senior content strategist for the venture capital firm, where he started right after graduation. As a university student, he took up multiple work opportunities in content and marketing for startups in Asia. These included interning as an associate at G3 Partners, a Seoul-based marketing agency for tech startups, running tech community engagements at coworking space and business community, ASPACE Philippines, and interning at workspace marketplace FlySpaces. He graduated with a BS Management Engineering at Ateneo de Manila University in 2019.