In a recent interview with The Independent Investor, early stage venture capitalist Eric Manlunas pointed to the massive opportunity around Filipino businesses adopting new technologies to digitize their operations. “Business owners of any size, if they haven’t yet, should seriously consider onboarding technology tools to enhance their competitiveness,” he said. “They should focus on finding the appropriate automation, analytics, and business intelligence software to not only create efficiencies, but give them unique insights on how to improve their businesses.”
According to a Google Philippines report developed by Singapore-based AlphaBeta, these digital transformation efforts are expected to unlock up to P5 trillion worth of economic value annually by 2030. However, AlphaBeta Managing Director Fraser Thompson says that Philippine businesses face a number of challenges on their path towards digital transformation, including low digital adoption, a lack of awareness of new technologies, and broad digital skill gaps.
For the 952,969 micro, small, and medium enterprises registered with the Department of Trade and Industry in 2020, these challenges make it impossible for them to benefit from the wealth of technological services cropping up for Filipino businesses. And because this sector accounts for 99.51% of registered businesses—not including the millions of informal ventures across the country—the Philippine economy is all the worse for it.
Digital services startup Peddlr hopes to cater to these pen-and-paper operations, allowing merchants to digitize their sales, inventory management, and accounting processes through a smart point-of-sale (POS) mobile app. By addressing the inefficient, time-consuming, and error-prone systems these firms rely on, Peddlr aims to jumpstart the digital transformation journeys of the nation’s smallest businesses.
Now, following their latest milestone, a $500,000 pre-seed raise led by Foxmont Capital Partners with participation by notable angel investors, Peddlr aims to take their mission to the next level.
Empowering through automation
Hailing from Catbalogan City, Samar in Eastern Visayas, founder and CEO Nel Laygo came up with the idea for Peddlr during his college days at the University of San Carlos. One of his theses was centered around helping sari-sari store owners improve their business by creating accounting reports.
“I looked into the restructuring of sari-sari stores that would lead to optimizing their operations,” he said. “Gusto ko talaga ayusin yung accounting and bookkeeping nila so I offered my manual accounting services to 30 sari-sari stores and, after a month, pinakita ko sa kanila yung sales and revenue nila. This helped me truly understand the bottom line.”
[“I looked into the restructuring of sari-sari stores that would lead to optimizing their operations,” he said. “I really wanted to fix their accounting and bookkeeping systems, so I offered my manual accounting services to 30 sari-sari stores and, after a month, I showed them their sales and revenue. This helped me truly understand the bottom line.”]
After graduating in 2010, Laygo pursued a career in corporate finance, putting Peddlr on the backburner while he directed his coding skills and interest in process automation towards working with FMCG giants P&G and Unilever as a financial tool builder. His career took him across the globe, working across Asia and Latin America. All the while, Laygo continued dabbling in tech startups, managing an on-demand concierge service venture called HiBes.
Many of the store owners he worked with didn’t even write their records down on paper, relying instead on memory, making it impossible to track their performance over time.
It was while he was stationed in Unilever’s India office in 2017 that Laygo discovered Khatabook, a digital ledger cash book and online payment app for small businesses, reigniting his interest in empowering MSMEs. He saw how Khatabook addressed the pain points of India’s traditional micro enterprises, and believed Filipino entrepreneurs deserved the same. So in 2018, Laygo decided it was finally time to leave the corporate sector and pursue the passion for supporting small businesses he had sparked during his college days.
In September 2020, he formed his team and founded Peddlr.
Nel had seen firsthand the challenges merchants face when using pen-and-paper systems to keep track of sales, inventory, and customers’ outstanding balances. He says many of the store owners he worked with didn’t even write their records down on paper, relying instead on memory, making it impossible to track their performance over time.
Armed with this knowledge, Nel and his team got to work on building an intuitive system that was low in complexity, but high in utility. Catering to a wide variety of micro enterprises like food vendors, market stalls, and online stores, Peddlr provides mobile POS, inventory management, expense tracking, and accounting report services—free of charge through their mobile app. Available on all major mobile platforms, the Peddlr app has garnered over 250,000 downloads across the Apple, Google, and Huawei app stores.
Scaling a grassroots community
“Simplicity is at the core (of Peddlr), and we make sure to pair it with the right amount of complexity to add value to people’s lives,” Laygo said, outlining the tightrope his team had to walk in designing a system for users that have been traditionally hesitant to adopt intimidating, unfamiliar technologies.
“Nakakatakot sa kanila yung technology, lalo na kung parang wala silang kilala na gumagamit rin ng Peddlr. It was very clear to me that there was a need to build a community,” said Laygo.
[“Technology is very intimidating to them, especially for those who don’t personally know anyone else using Peddlr. It was very clear to me that there was a need to build a community,” said Laygo.]
After realizing that his biggest champions were his own users, Laygo got to work investing in growing a grassroots community of passionate ambassadors that could help him grow Peddlr organically. Peddlr’s Facebook group currently has over 23,000 members, with nearly 1,000 new users joining just this past week. Here, Laygo and his team have cultivated an engaged community, with dozens of daily posts from users helping one another better use the app in their businesses’ daily operations. New users are encouraged to ask questions, with seasoned users happily sharing tips and tricks. According to Laygo’s team, many of the app’s features were directly pulled from user suggestions shared on this group, leading them to prioritize features such as the ability to manage operations offline.
Peddlr looks simple on the outside. But once you open it, it has everything. It really inspires you to come up with new business ideas, just from all its features.
Efren Cresencio, entrepreneur and Peddlr user
One user, Efren Cresencio, said that Peddlr was a game-changer for his small businesses: a printing service and online store selling supplements, gadgets, and apparel. With the app’s wealth of offerings, Cresencio says he relies on Peddlr to do more than simply send formal invoices to his clients. According to him, its many features inspire him to expand as an entrepreneur. “Parang kahon si Peddlr. Napakasimple sa labas pero pagbukas mo andyan na lahat,” he said. “Mapapaisip ka ng bagong business ideas dahil sa mga features na meron siya.”
[“Peddlr is like a box. It looks simple on the outside. But once you open it, it has everything,” he said. “It really inspires you to come up with new business ideas, just from all its features.”]
Another user, Melchora Valero, says that Peddlr’s automated messaging features have helped her address a longstanding challenge for her general merchandising store—chasing down customers that owe her money. “Lalo na yung credit ledger kung saan may SMS feature din ito para mag paalala sa may utang sayo na kailangan na nilang magbayad.”
[“The credit ledger in particular, with its SMS feature, has been really useful in helping remind the people who owe my business money that they need to settle their debts.”]
Growing the pie for digital transformation
After less than a year of experimenting, Peddlr was formally launched in July 2021, exhibiting incredible organic growth through their passionate user base. By November, four months later, the startup secured $500,000 in an oversubscribed pre-seed funding round led by Foxmont Capital Partners.
“MSMEs have been eager to join the digitalization of the Philippines and we look forward to Peddlr becoming a key part of that transformation,” said Nico Sibal, Foxmont Capital Partners’ director of portfolio management.
Among the notable firms and angel investors that participated in the round were Paulo Campos (ZALORA Philippines Co-Founder and Managing Director), Constantin Robertz (Locad Co-Founder and CEO), Lisa Gokongwei-backed Kaya Founders, Luis Sia (PayMongo Co-Founder), Aaron Kemmer (Magic Inc. Co-Founder), and Richard Juan (celebrity host and entrepreneur).
According to Laygo, proceeds from their pre-seed round have gone towards continuing the growth of their community and improving the app’s infrastructure. Building on their success servicing the nation’s micro enterprises, the Peddlr team is now exploring new revenue streams for their platform. Among their product expansion plans are partnerships that will allow sari-sari stores and other small vendors to compete with convenience stores like 7-11 by offering mobile load and serving as bill payment hubs for their communities.
By establishing these revenue streams for his startup and thereby expanding the capabilities of their users to grow their own businesses, Laygo says Peddlr continues to be committed to servicing their community of sari-sari stores, market vendors, and other entrepreneurs on the frontlines of Philippine MSMEs. Their goal is to end 2022 with a million users.
“Peddlr’s goal is to grow alongside these micro and small businesses,” Laygo said. “We want to put digital micro and small businesses at the heart of economic recovery for this year and beyond.”