This Filipino Tech Startup Empowering Sari-Sari Stores Just Raised P112 Million in a Seed Round

With all the convenience online shopping has afforded a lot of us, it’s easy to forget that a large swath of our population still gets their food, grocery, and other goods from humble sari-sari stores. 

In fact, there are over a million sari-sari stores currently operating nationwide. It’s head-scratching to think that a majority of them are still being run with pen and paper. But that won’t be for long, not if homegrown tech and micro-retail platform Packworks can help it.

Packworks offers sari-sari store owners an easy-to-use app platform meant to digitize their operations, from inventory management to accounting to even loan application and finance management. While this might sound ambitious, Packworks recently secured a $2 million seed investment from its partners, which both serves as a huge boost as well as a stamp of approval for its concept.

Packworks founders with some of their investors

Photo by Packworks.

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Zeroing in on pain points

Sari-sari stores haven’t changed much despite decades of existence. Aside from adoption of digital payments, most still use pen and paper to log sales and manage inventory. Packworks is the brainchild of three motorcycle-riding friends: Ibba Bernardo, Bing Tan, and Hubert Yap. They aim to address these pain points and help who they refer to as “mom-preneurs” who usually run the sari-sari stores. 

“This was an underlying intention for me, to figure out how to automate things for businesses so that at least people can spend more time with their family,” says Tan, Packworks’ CEO. “And this resonated well with my partners.” 

The veteran entrepreneurs started Packworks in 2018, initially focusing on connecting multinational companies to neighborhood stores. It then transitioned into providing a platform that digitizes and modernizes all aspects of sari-sari store operations through a mobile app. 

A new approach to technology

Business-to-business enterprise resource planning (ERP) systems aren’t new and big companies use them all the time. But that’s exactly what Packworks is trying to achieve: to democratize supply-chain technology.

“Technology has always been a bastion of those who had money. Enterprises have always had this technology,” says Tan. “So, the main philosophy for us building the platform that we did was it had to be cheap, and it had to be easy.” 

Developing an app that serves as a one-stop-shop for small store owners that’s also easy to use is impressive in itself,  but how do you get people in a highly traditional industry to buy-in to your digital solution? The key, according to Packworks, is customizing services according to each store's needs and capacity. 

“There’s not one type of sari-sari store. We’ve got a ton of functions and we give access as they learn each function depending on the scale,” explains Bernardo, Packworks marketing chief. “Sometimes they’re not going to have inventory management, sometimes they’re not going to have delivery tracking. So we keep it simple, we make it modular, and we open up access per phase of evolution of a store.”

Ibba Bernardo

Photo by Packworks.

Not a disruptor

Tech startups trying to revolutionize industries isn’t new, but most are known for replacing and pushing out old industry players. Packworks insists they aren’t actually disruptors. 

“The sari-sari store is under threat from a lot of things,” says Bernardo. “One of those things that threaten them are the people (and brands) trying to go straight to the consumer. So we’re not here to disrupt, we’re here to amplify and enable. We’re here to make the stores stronger.” l

From a modest five store-partners in its inception, Packworks has already managed to bring in over 150,000 stores to use its platform, and it’s on pace to hit its target of 200,000 stores by the end of 2022.

But while product adoption rate is a good metric, a lot of startups have already failed because of a lack of a business model to generate actual revenue long-term. With every transaction throughout the supply chain being recorded, Packworks enables both store owners and brands to analyze supply and demand for every type of product, and in today’s world, data is practically worth more than gold.

“For distributors and principals, it’s a different view. For them, they don’t have access (to sari-sari stores) so that’s where we charge subscription and performance-based fees for marketing or promotions,” explains Yap, the company’s chief platform officer.

“If you had this set of data and you understood where transaction flow is happening at the MSE level, you can just imagine how we can use this type of data to help everyone,” adds Tan.

Support from the industry

A great concept with a solid business plan run by experienced entrepreneurs has enabled Packworks to attract some impressive lineup of supporters, including industry stalwarts such as former Department of Trade and Industry Secretary Ramon Lopez.

“MSME’s are 99.4 percent of companies and corporations (in the Philippines) and if we reach out to them, definitely you’ll be able to change the way we do things and change the way we progress here in the country (by) providing of course the necessary technology and innovation,” says Lopez. 

Packworks is also poised to get more international support after a very successful seed round led by various business entities including logistics group Fast Group, equity firm CVC Capital Partners, ADB Ventures, Arise, Techstars, and IdeaSpace Foundation. 

Photo by Packworks.

Towards the future

Armed now with significant resources, Packworks will proceed with developing The Pack: SuperStore App, a companion app that focuses on inventory, bookkeeping, and data collection. The company is also set to put up a new department that will focus on on-ground engagement to reach even more owners and expedite adoption.

“We bootstrapped our way to helping 150,000 sari-sari stores. We’re helping communities all over the Philippines to grow and become more resilient. Imagine how many more we can help with all these awesome partners. Our vision is now global,” adds Bernardo.