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- 🤯 The shocking truth behind Lummo's collapse
🤯 The shocking truth behind Lummo's collapse
How Lummo (formerly BukuKas) died after pivoting 4 times in 4 years
Admond Lee
December 01, 2024
Hey Founders,
Welcome to The Runway Ventures — a weekly newsletter where I deep dive into failed startup stories to help you become the top 1% founder by learning from their mistakes with actionable insights.
Today’s story is about how Lummo (formerly BukuKas) collapsed after pivoting 4 times in 4 years. Let’s get to it! 🚀
Today at a Glance:
☠️ 1 Failed Startup → Lummo (formerly BukuKas)
⚠️ 2 Mistakes → Lack of product-market fit
🧠 3 Lessons Learned → Pace your pivots
🔗 The Runway Insights → 3 $1M+ AI startup ideas to build in 2025 (and how to grow them)
💰 Southeast Asia Funding Radar → Pi-xcels raises $2.7M led by Headline to bring one-tap NFC digital receipts to global retailers
☠️ 1 Failed Startup: Lummo (formerly BukuKas)
🚀 The Rise of Lummo
🇮🇩 BukuKas (before rebranding to Lummo), founded by Krishnan Menon and Lorenzo Peracchione in 2019, was a digital bookkeeping application designed specifically for the unique challenges faced by Indonesian SMEs.
Krishnan, who had firsthand experience working with local merchants during his tenure at Lazada, recognised that these businesses needed a simpler solution.
The Problem — 😵💫 Many SMEs in Indonesia struggled with traditional bookkeeping methods that were often cumbersome and confusing.
They relied on traditional, manual methods for bookkeeping and financial management, which were often inefficient and error-prone.
This lack of digitisation hindered their ability to scale and optimise their operations.
The Solution — ⚡️ BukuKas digitised these processes by providing an end-to-end software stack that streamlined financial management.
📱 It provided a user-friendly app that transformed physical ledgers into a digital format, enabling merchants to easily track sales, profits, and expenses without the intimidation of complex accounting jargon.
This is important as many Indonesian SMEs’ business practices aren’t moving forward because many proprietors have a fear of “complicated” products.
📈 By automating tasks like invoicing and inventory management, BukuKas helped businesses save time, reduce errors, and gain better insights into their financial health.
Indonesia is home to more than 60 million MSMEs which generate over 60% of the country’s GDP.
 | 💃 BukuKas quickly gained traction. By April 2020, just 4 months after its launch, it had attracted nearly 300,000 users, with around 80% coming from outside Jakarta. 🦠 When the pandemic hit in 2020, BukuKas positioned itself as a crucial ally for SMEs navigating the new normal. It expanded its offerings beyond bookkeeping to include features like BukuKasPay, which allowed businesses to manage payments digitally. The app's simplicity and free services — like automated payment reminders via WhatsApp — made it particularly appealing to small business owners who were often reluctant to adopt more complicated software solutions. |
🤯 By May 2021, BukuKas had onboarded 6.3 million businesses, recording an impressive $25.9 billion in annualised transaction volume (~2.2% of Indonesia’s GDP! 🇮🇩).
BukuKas’s crazy growth was fuelled by substantial funding rounds, including:
💰Series A — $10 million led by Sequoia Capital India
💰💰Series B — $50 million led by Hedosophia
💰💰💰Series C — $80 million led by Tiger Global, Sequoia Capital India (with participation from CapitalG and even Jeff Bezos)
🔥 In January 2022, BukuKas rebranded to Lummo as part of a strategic shift to broaden its focus beyond bookkeeping into e-commerce and direct-to-consumer (D2C) markets.
It was very ambitious as they wanted to become an all-in-one financial solution for Indonesian SMEs.
📉 The Fall of Lummo
It was all of a sudden, I logged in the morning and was asked to join a meeting with the India lead instead of my standup and after that, all access was gone.
🥊 However, when the reality hit, their ambition backfired in a big way.
🥵 Why? Because Lummo faced mounting pressure to deliver results after raising $140 million across 3 funding rounds.
In desperation, Lummo underwent about 4 major pivots within just 4 years, each time scrapping previous strategies that failed to resonate with users, leading to its downfall without achieving a solid product-market fit.
📌 Here’s what happened to Lummo:
🔥 The Crazy Growth
Dec 2019 — BukuKas was founded by Krishnan Menon and Lorenzo Peracchione.
2020 — 🌱 Rapid growth and initial funding
Apr — Gained nearly 300,000 users within 4 months.
Jun — 💰 Received seed funding from Surge (Sequoia India’s accelerator program) and other investors.
Nov — Launched TOKKO as an online D2C commerce builder.
Dec — 50% increase in weekly sign-ups and a 40% increase in transaction volume as the COVID-19 pandemic accelerated digital adoption among businesses.
2021 — 🚀 Crazy growth & traction
Jan — 💰 Raised $10 million in Series A funding led by Sequoia Capital India.
Apr — Launched BukuKasPay to enable merchants to handle payments digitally, hitting tens of millions of US dollars in monthly transactions within weeks.
May — 💰 Raised $50 million in Series B funding led by Hedosophia to enhance product offerings and scale operations.
By this time, BukuKas had onboarded 6.3 million businesses, with an annualised transaction value of nearly $25.9 billion (~2.2% of Indonesia's GDP).
2022 — 🧠 Strategic shift & rebranding
Jan — 💰 Raised $80 million led by Tiger Global, Sequoia Capital India, and even Jeff Bezos — bringing the total funding to $140 million.
Hit 500 employees at its peak.
Rebranded to Lummo to expand beyond bookkeeping.
Jun — 🤯 (1st Layoff) Suddenly, Lummo laid off 150+ employees due to an economic downturn.
Sep — Acquired a digital ledger app called Catatan Keuangan Harian to expand its market share and enhance its service portfolio.
Oct — Launched a new commerce enablement platform called LummoSHOP (formerly Tokko) to help MSMEs create their own online stores and manage customer relationships directly.
This pivot was seen as a way to capture a larger market opportunity and diversify revenue streams.
⛱️ Lummo had 2 apps under its umbrella:
BukuKas — bookkeeping app
LummoSHOP — e-commerce enabler solution
Nov — 🪓 (2nd Layoff) Laid off another 150+ employees.
🥵 Missing product-market fit
2023 — 📉 The final collapse
Mar — 🪓 (3rd Layoff) Number of employees in this round was uncertain.
Apr — 🚨 Reports emerged indicating that Lummo was struggling with financial instability.
Lummo was said to be considering shutdown or acquisition.
According to DeadStreetAsia, Lummo would also return $70 million to investors after closing shop.
26 May — ⚠️ BukuKas app ceased operations.
Jun — As market conditions worsened and additional funding became harder to secure, Lummo faced mounting pressure from investors and stakeholders regarding its viability and future prospects.
Sep — Lummo entered voluntary liquidation according to Singapore's ACRA filings.
It seems like Lummo’s shutdown was confirmed after Lorenzo (co-founder of Lummo) posted about the news on LinkedIn.
Iya, sedihnya setelah usaha keras cerita kami harus berakhir. Model baru, tidak memiliki potensial seperti yang diperkirakan sebelumnya.
🇮🇩 Lummo's initial success was built on addressing real pain points for SMEs in Indonesia. However, its ambitious expansion plans led to confusion and misalignment with market needs.
As it attempted to transition from a bookkeeping app to a comprehensive e-commerce platform without solidifying its core offerings, it lost sight of its core value proposition.
Want to learn more about Lummo’s downfall?
⚠️ 2 Mistakes
Mistake 1: Lack of product-market fit
⚡️ Although Lummo raised $140 million within 3 years, it pivoted 4 times in 4 years with 3 rounds of layoffs.
Unfortunately, it was a clear sign that Lummo failed to achieve a clear product-market fit despite multiple pivots.
🥲Lack of focus:
The pivot to Lummo involved significant changes in the business model and product offerings. However, the company struggled to establish a strong product-market fit in the competitive e-commerce space.
The rapid pivots and expansion into new areas may have diluted their core strengths and confused their existing user base.
💸 Operational challenges
With the rebranding and new product launch, Lummo faced operational challenges, including high burn rates and difficulty in achieving sustainable revenue growth.
The company had to manage a large team and infrastructure, which added to the financial burden.
Mistake 2: Over-reliance on funding
With $140 million of funding, Lummo aggressively hired and scaled operations, hitting 500 employees at its peak. The influx of capital may have led to aggressive expansion and spending without a solid foundation for long-term viability.
💸 Every time Lummo pivoted, they scrapped old strategies and invested heavily in building new ones. Each pivot meant more spending— on product development, marketing, customer acquisition, and rebranding (i.e. BukuKas to Lummo).
These pivots eroded the company’s resources without guaranteeing product-market fit.
🧠 3 Lessons Learned
Lesson 1: Pace your pivots
SEA’s startup ecosystem is fast-paced, but that doesn’t mean founders should jump into every new opportunity. Lummo pivoted 4 times in 4 years, losing focus and exhausting resources.
In SEA, where market dynamics can shift quickly, strategic patience and incremental changes are crucial.
🌟 Key Takeaways:
🧠 Pivot wisely (not quickly)
SEA consumers and SMEs value trust and reliability.
Frequent shifts in product offerings or business focus can confuse users, reduce confidence, and erode brand loyalty.
Given the relatively low margins and price sensitivity in SEA, large-scale pivots without proven demand can be catastrophic.
For example, Shopee tested localised features like live selling in smaller markets before rolling them out regionally, ensuring they resonated with SEA users’ shopping behaviour.
⚡️ Know when to pivot
When it comes to pivoting, knowing when to pivot is equally important than knowing what to pivot.
I always re-watched this video by Y Combinator on knowing the best time to pivot as a startup — highly recommended.
In fact, before pivoting, you should iterate as fast as you can to constantly test your hypothesis and improve your product’s value proposition.
Read The Lean Startup to learn how to do this (before pivoting).
Lesson 2: Stick to the core
Success in startups often comes from doing one thing extremely well rather than trying to do everything adequately. BukuKas had a product-market fit with their bookkeeping app but diluted their focus by trying to become an e-commerce platform.
🥲 Their pivot to e-commerce ignored their core users' primary pain point → simple financial management for SMEs.
🌟 Key Takeaways:
🧪 Validate first before diversifying / scaling out
SME owners in SEA often prioritise simple, affordable, and localised solutions over flashy, all-in-one products.
Many are hesitant to adopt complicated tech, especially if it doesn’t directly address their most pressing challenges.
Expanding into unrelated markets or overloading your product with features can alienate loyal users who just need your original solution to work better.
The solution? Before diversifying, survey your customers, measure retention, and iterate on your existing solution until it's irreplaceable.
Product-Market Fit = Retention
Lesson 3: VC game is not for everyone
🫵🏻 Raising venture capital can feel like you’ve unlocked a treasure chest, but that chest comes with expectations.
For Lummo, securing $140 million from heavyweights like Sequoia and Tiger Global brought immense pressure to scale rapidly. This "grow fast or die" mentality led them to over-expand, lose focus, and make hasty decisions like multiple pivots and bloated hiring.
Here’s why VC game is not for everyone…
🌟 Key Takeaways:
🥲 You lose control
VCs often take board seats or impose conditions. As a founder, you may find yourself steering the company based on investor priorities rather than customer needs or your vision.
For example, Lummo’s aggressive pivots likely stemmed from investor pressure to broaden its market and justify the massive funding rounds, even if the core bookkeeping app was still growing.
🚀 It’s all or nothing
VCs play for unicorns, not steady businesses.
If you can’t deliver the growth they expect, you risk losing support — and your startup.
Before you raise from VCs, think carefully about what kind of business you want to run for the long term.
It’s perfectly fine to run a lifestyle or bootstrapped business, but it’s not okay to raise from VCs for the sake of branding, fail to deliver, get burnout, and then kill the company (then why start in the first place?).
🔗 The Runway Insights
💰 Southeast Asia Funding Radar
Pi-xcels raises $2.7M led by Headline to bring one-tap NFC digital receipts to global retailers (Link)
Podium raises $15.2M to makes designing cost-efficient and sustainable buildings faster and easier (Link)
MediSun Energy, an SG climate tech startup, secures $8.75M to expand to in Middle East and North Africa (MENA) (Link)
Toku secures $5M Series A extension round led by Betatron Venture Group to further develop AI Chat and AI Voice Agent technology (Link)
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That’s all for today
Thanks for reading. I hope you enjoyed today's issue. More than that, I hope you’ve learned some actionable tips to build and grow your business.
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See you again next week.
- Admond
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