This Startup Founded by a Samar Native Has So Far Raised Nearly a Quarter of a Billion Pesos
Peddlr is a digital accounting and bookkeeping app that aims to replace the traditional pen-and-paper sales recording, credit management, and manual inventory stock counting process. On Tuesday, February 8, the app, which was founded by Catbalogan, Samar native Nel Laygo, announced that it raised $4.3 million in seed funding. This comes less than a year after it was launched in July 2021.
The financing round was co-led by Patamar Capital and Crestone Venture Capital and was joined by existing investors Foxmont Capital Partners and Kaya Founders as well as new investors January Capital, 500 Southeast Asia, Nordstar, Vulpes Ventures, KDV Capital and 335 Fund.
Also participating in this round were a number of angel investors: partner at Quest Ventures Yiping Goh; Summit Media President Lisa Gokongwei; , Zalora Group CCO Giulio Xiloyannis; Zalora Group COO Rostin Javadi,; founder and CEO of Kippa Kennedy Ekezie; Antler co-founder and Antler Asia managing partner Jussi Salovaara; Antler Indonesia partner Subir Lohani; and Antler Southeast Asia associate partner Markus Bruderer and XA Network, the leading tech leaders' investment network in Southeast Asia.
This brings the startup’s total funding to almost $4.8 million (P247.3 million), after a pre-seed round of $500,000 was announced in November 2021.
“We’re one of the first grassroots startups outside of Metro Manila to reach that amount of funding,” Laygo tells Esquire Philippines in an interview.
Peddlr says it will use the fresh capital to further accelerate user growth to help one million micro and small businesses by the end of 2022 as well as speed up the rollout of new app features and digital products that would help its users. The app’s main user base are micro and small entrepreneurs like sari-sari-store owners, market stall vendors, and the like.
According to the company, its userbase has experienced rapid organic exponential growth and had grown over 16 times since July 2021. Laygo said app downloads reached 250,000 as of December 2021 with barely any marketing efforts, just word-of-mouth. About 65 percent are sari-sari store owners, barber shops, salons, wet market vendors, wholesalers, bakeries, even ice cream vendors.
Nel Laygo: from Samar to the world
Laygo studied accounting at the University of San Carlos in Cebu. Even then he took an interest in micro enterprises like sari-sari stores. He would go around the neighborhood in Cebu and check out the stores and wonder why most of them never prospered or grew.
“After looking at the model, I understood that accounting was a separate entity model,” he said. “The business owner must be separated from the business, kasi otherwise, nauubos lang yung kita sa day-to-day expenses.”
Laygo joined the FMCG (fast moving consumer goods) industry and spent five years with Procter & Gamble. He was a supply chain finance management officer and then moved to Unilever after he was offered a position that would take him back to Manila to head a team after the company decided to migrate all of the accounting and IT services in Southeast And North Asia to Manila. Afterwards he was assigned to India to work in digital analytics for the company’s ready-to-drink category.
Eventually, Laygo’s job took him to Mexico, where he worked in regional finance operations for North and Latin America, and then to Singapore.
In 2016, Laygo started a small side business in his native Catbalogan—a digital assistant startup called HiBes. Through SMS, clients could request for people to do random things such as buy groceries or go on errands.
“You didn’t even need internet,” he said. “We managed to make it profitable and scale it to 18 cities. It was one of the reasons why I left Unilever in 2018.”
That year, Laygo felt like he was finally ready to leave corporate life and go all in on the startup life. HiBes proved to be successful, until in 2019, giant names like Foodpanda and Grab began expanding into emerging cities.
“They had the playbook na on how to scale,” Laygo said, referring to Foodpanda and Grab. “In terms of spending, it was unbelievable. At one point they were even giving subsidies to the riders. Suddenly it was hard to compete.”
While he was in India, Laygo was able to study and learn from a promising startup called Khatabook. He calls it the “OG bookkeeping app.” He remembers how simple and straightforward it was that it had been “copy-pasted” into similar apps like Bukukas in Indonesia. But he wasn’t convinced that the model would work in the Philippines.
How Peddlr began
But Laygo’s background with FMCG and MSMEs—and the knowledge and insights he’s learned from the industry over the years—prepared him for his next big venture.
“One of the reasons I started Peddlr is that I know the tools that can help MSMEs,” he said. “Initially the model was very different from bookkeeping. It was just to solve inventory management. Like, listahan ng utang.” Eventually, Peddlr evolved to become like a digital storefront for MSMEs, helping entrepreneurs record sales, manage credit, and track inventory.
Laygo didn’t have much capital, so his approach was genuine bootstrapping. After developing the app, the Peddlr team asked volunteers to test it out. Many of them opted out of using the app in those first few weeks.
“We discovered that they were uncomfortable sharing details like their address and mobile number,” Laygo said. “Baka scam daw. They were also not very comfortable about the payment system. They were afraid because they might end up paying more in taxes.”
Those initial pain points rose out of a Peddlr App community, where users started an online dialogue. “I told them, we hear you, but we cannot give you all of what you want,” the founder said.
Eventually they found a middle ground. People started using the app to track their store income, expenses and inventory, and they were willing to share private information, while developers kept that information safe and secure.
Beta testing for the app started in January 2021 and the actual launch happened in July of the same year. By December over a quarter of a million downloads had been recorded and the number is still rising. User feedback has been positive all around, with most crediting the app for helping them improve their topline.
Asked about the revenue model for the app, Laygo is candid about there being none as yet.
“The idea is just to digitalize the process,” he says. “Our goal for 2022 is to have a million users, then we’ll figure out our monetization model.”
The once tiny Peddlr team has grown to 24 as of the beginning of 2022, and Laygo says they are keen to onboard more. The startup is still based in Catbalogan, but there are plans to eventually move to Manila and find office space in startup hotspots Bonifacio Global City or Makati, especially after this latest funding round.
“It’s still strategic from our end to stay in the provinces, but later on, we’re going to have to move some operations in Manila,” Laygo says. “For 2022, the number one plan is to dominate the market and reach one million registered users. The second is to build a winning team. We will be on a massive scout and hiring new talents, not just in the (Visayas) region but the entire Philippines.”