Indonesian e-commerce platform for modest fashion HIJUP today announced the launch of an IDR100 billion (US$6.9 million) fund to support small businesses in the modest fashion category.
Called HIJUP Growth Fund, the company aimed to invest around IDR2 billion (US$138,000) into each company, specifically targeting locally based modest fashion brands.
The fund offers three different schemes depending on the companies’ stages and needs:
- Implementation of outright sales scheme for earlier stage companies
- Provision of working capital under a sharia-based business financing scheme for mid-stage companies
- Growth investment for later-stage companies.
In addition to funding, HIJUP Growth Fund will also provide mentorship for the fashion brands. It has invested in companies such as Buttonscarves and Puru Kambera.
“The goal of this fund is not to dominate, but to empower,” said HIJUP CEO Diajeng Lestari in a virtual press conference.
“This is a solution to help [small businesses] survive and grow stronger … It is also a proof of our commitment to support modest fashion industry by becoming more than just a marketplace. We intend to become an ecosystem,” she explained.
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The CEO also stated that the startup does not intend to fully acquire the brands that they are going to invest in.
Starting out in 2011, HIJUP works with up to 300 local modest fashion brands by implementing the online mall model.
The company was founded to seize opportunities in the modest fashion segment in Indonesia, the largest Muslim population in the world.
According to Sandiaga Uno, minister of tourism and creative economy, who was present at the HIJUP press conference, the fashion industry is the second largest contributor to the Indonesian creative economy sector.
“This is strongly related to the industry’s ability to digitalise early on,” he explained.
In the Southeast Asian tech startup ecosystem, there has been an ongoing trend of startup founders setting up a fund to invest in fellow startups and/or small businesses.
This trend can also be seen in the Indonesian tech startup ecosystem. In March, founders of online coffee shop chain Kopi Kenangan announced the launch of an angel fund that is meant to support Indonesian startups.
Called Kenangan Fund, the sector-agnostic fund has invested in logistics startup Dropezy, fintech platform Bukukas, podcast company Noice, and automotive firm Otoklix.
Its average ticket size ranges from US$10,000 to US$150,000 per investment.
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