Ula, the Indonesian warung-tech startup, has announced its decision to wind down operations and return approximately 30% of the total capital raised to its investors.
The company’s co-founder and CEO, Nipun Mehra, along with the founding team, is set to embark on a new venture unrelated to warung-tech or the B2B marketplace.
Since its inception, Ula has raised over US$141 million from prominent investors, including Bezos Expeditions, Prosus Ventures, Tencent, Peak XV (formerly Sequoia India), Lightspeed Venture Partners, B Capital, Northstar, and AC Ventures.
As of late 2022, Ula held US$74.26 million in cash and cash equivalents, a figure that now stands at approximately US$50 million, according to DealStreetAsia.
Investors have been given the option to either redeem their investments at 30% on the dollar or roll them into Mehra’s upcoming venture.
“We are deeply grateful to our shareholders and partners for their continued belief in our vision,”
said Mehra in a statement.
“This restructuring is the start of a new journey – one fuelled by the same values that have always guided us: innovation, resilience, and a commitment to driving impact in our markets.”
Ula’s decision follows challenges in achieving profitability amid high operational costs, shifts in demand, and increasing competition.
The company had explored various strategic pivots, including exporting food and beverage products to the US and potential acquisitions, but these efforts did not yield the necessary results.
By late 2023, Ula had paused operations and implemented workforce reductions, marking the beginning of its gradual wind-down.
Industry experts acknowledge the difficulties faced by warung-tech startups in Indonesia, with several companies either pivoting or transitioning to asset-light models.
Despite its initial success in serving over 100,000 warungs across East, Central, and West Java, Ula ultimately could not establish a sustainable business model.
While the specifics of Mehra’s next venture remain undisclosed, industry sources suggest it may be based in India and focus on artificial intelligence (AI), with potential backing from new investors.
Featured image credit: edited from Ula
