Following on as an addendum to our current issue of Asia Investment Research (last quarter inbound investments into Asia, US$250 here) we can advise that earlier this year, KKR, a leading US and global investment firm, and GrowSari, a B2B e-commerce platform serving micro, small and medium-sized enterprises in the Philippines, announced the signing of definitive agreements under which KKR will invest US$45 million to lead GrowSaris Series C funding round. KKRs investment in GrowSari will support the companys expansion into more regions across the Philippines and strengthen its financial services capabilities.
Founded in 2016, GrowSari is a leading tech-enabled B2B platform that helps the Philippines small physical retail stores, including neighborhood retail shops (sari-sari stores), roadside and market shops (carinderia), and pharmacies, enhance their service levels and access a wider range of products and value-adding services. This allows the stores to provide local communities with more comprehensive offerings, including digital services.
Today, GrowSari is present in 220 municipalities across the regions of Luzon and offers over a hundred types of different services including making bill payments, telco reloads, and wallet top-ups, as well as procurement services for common retail goods and pharmaceutical medicines.
Strong tailwinds around digital adoption, proximity shopping, and economic growth in the Philippines have also contributed to a 6.5x increase in gross merchandise value for GrowSari since 2019 and a 2.5x increase in revenue over the same period. In 2021, the Singapore Venture Capital Private Equity Association named GrowSari as Venture Capital Deal of the Year.
Speaking on the latest investment, Reymund ER Rollan, CEO and Co-Founder of GrowSari, said, We will be accelerating our presence nationally to more municipalities and cities in the Philippines. Our investments will be focused on expanding in Visayas and Mindanao this 2022. This will bring us a step closer to our mission of creating a positive socio-economic impact on the lives of more MSME owners and the communities they serve.
The industry, operational and financial expertise and network of KKR will be a great complement to the passion, dedication, and strong culture of excellence that GrowSari has built over the years.
Louis Casey, KKRs growth technology lead in Southeast Asia, added, GrowSari is aligned with one of our core technology investment themes in Southeast Asia, which is supporting MSMEs with software and financial services. Reymund and the team at GrowSari are excellent operators who have built an impressive flywheel that is powered by a number of proprietary applications. They have also built a very efficient and repeatable go-to-market motion that is underpinning their impressive growth.
The deal again highlights the growth potential in low-middle class markets in Southeast Asia. The Philippine Institute for Development Studies (PIDS) showed that as of 2020, there were 9.4 million low-income families in the country, and 8.5 million lower-middle-income families in the country, many of them reliant on sari-sari stores for their daily purchases. The average Philippines family has 4.8 members, meaning this income group equates to about 85.9 million people of the Philippines total population of some 109 million.
