Indonesian startup Raena has secured $1.82 million in seed funding, planning to use the money to support social media influencers in the region in starting their own e-commerce operations, TechCrunch reports. Launched two months ago, Raena partners with several influencers in Southeast Asia whose combined number of followers exceeds 12 million.
Raena was founded by Sreejita Deb, who previously worked at Amazon, InMobi, and Google. The team includes former employees from Google, Amazon, Alibaba, Zalora, and several beauty brands and educational startups in Indonesia. Initially, the company focused on selling Japanese and Korean beauty products in Indonesia. The goods were in great demand despite high prices and low brand recognition among Indonesian customers. Thus, Deb came up with the idea of helping influencers with their consumer brands.
When it comes to social media penetration, Southeast Asian countries have some of the highest rates in the world, according to Sreejita Deb. However, influencers still cannot capitalize on their sizeable follower bases as influencer marketing is at the embryonic stage in the region.
“The internet ad market is not as robust as in the U.S. or China, so influencers have a ready-made audience, but their opportunity to monetize their audience is very low. That’s the premise on which I started the company. If influencers want to monetize their audiences, one way is to become their own e-commerce unit,” Deb says.
The company seeks to partner with influencers who have at least 500,000 followers on YouTube or Instagram. It uses a data-driven approach to figure out whom to work with. While the number of subscribers is important, audience engagement remains the most crucial metric for Raena. It uses a proprietary tool to analyze the number of likes and comments under the last 50 posts on Instagram. According to Deb, an engagement rate of about 2% is solid, while 10% is amazing.
“If someone has a million followers and has 10% engagement on average, but when you check branded content or a promo she’s done and see the engagement dips to .5%, that indicates her audience doesn’t want to hear her talking about brands or beauty. Those nuances become very important for us. We look for influencers who have a certain threshold of engagement and influence in different categories,” Deb explains.
Raena offers product development, logistics resources, and help with consumer research. Influencers are supposed to poll their audience about what they want to see in the final product, then go back to suppliers with the results and refine the product until it meets the criteria.
Deb says the markets in Indonesia or India are not as saturated as in other countries, which leaves a lot of room for new products and direct-to-consumer brands.
“One of the biggest things in our favor is that in the U.S., the U.K. or Europe when companies like Unilever or Procter & Gamble plan out a pipeline, those come to the top in more mature, developed markets like that. Essentially, there is still very little product innovation for audiences in markets like Indonesia or India and a lot of direct-to-consumer brands have rushed to fill that void,” she says.