Indonesia has a new kid on the block: Fabelio, a furniture e-commerce startup out of Jakarta, which on Tuesday announced a US$500,000 round of seed funding led by 500 Startups. The site went live on June 1.

The round saw participation from KK Fund — we now know what Saito’s upcoming investment in a marketplace for furniture was during out chat with him last month — and IMJ Investment Partners.

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The Indonesia opportunity for furniture e-commerce

All are clearly keen for a slice of Indonesia’s furniture market, which is expected to hit US$5.5 billion by 2018, according to research agency Conlumino. Coupled with what Fabelio sees as a lack of choice for the average Indonesian consumer, they’re convinced it presents an opportunity too good to pass up.

“Prices are too high, accessibility is too low,” the company said in a release. “Quality is poor and it has all the hassles of offline shopping. A lack of standardisation and quality customer service are other problems Indonesian furniture shoppers have to deal with.”

A few angels also jumped on the bandwagon. Indonesia is one of the biggest market opportunities in Southeast Asia, after all. Sandeep Tandon, Co-founder of FreeCharge, and Roshni Mahtani, Founder of TheAsianParent, are now both investors in Fabelio.

What is clear from the get-go is that the startup is trying to focus on a specific niche within the furniture e-commerce space in the country of 250-plus million: design centric items that leverage on its “unique partnerships with designers”.

On price, it’s aiming for “affordable,” but exactly what range that falls under for Indonesian consumers it did not specify. On quality: it wants to be seen as “premium”.

Sample furniture items from Fabelio

Sample furniture items from Fabelio

All-star team?

The startups is certainly right when it says that Fabelio’s team is comprised of “familiar names in the Indonesian startup scene”. The co-founders include:

— Krishnan Menon (CEO): previously involved in Freecharge for its Southeast Asia expansion, as well as Lazada Indonesia and Zalora Southeast Asia.
— Christian Sutardi: formerly an Associate at Monk’s Hill Ventures, and co-founder of Lolabox. (We exclusively reported on his leaving the firm along with partner Stefan Jung in May.)
— Marshall Utoyo: co-founded Conclave, a “tastefully designed” co-working space in Jakarta, and FASA, an award-winning furniture design house.
— Srinivas Sista: formerly at Lazada Indonesia in buying operations.

Tapping local sources

There’s a few other reasons why this venture could work if you consider some of the basic facts.

For instance, Indonesia still offers access to furniture craftsmanship at low costs. But too often imported Chinese products are taking the limelight — items that Fabelio sees as usually “sub-standard”.

So it wants to change that, and blames it on the “unorganised nature of the market” in Indonesia. But there may be a bigger problem. The startup explained:

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“Indonesian furniture designers today have no platform to showcase and sell their creations. Cost of production, marketing, lack of economy of scale limit them. Fabelio seeks to bridge this gap between designers and consumers. Designers can display and sell their designs through the website. Fabelio will handle production and distribution.”

Right now, the company is offering more than 350 items on its website, due to grow to more than 2,000 by year end. And if it can get it right in Indonesia, it plans to expand to Singapore, Thailand and Australia as its first foreign-market stops outside its home turf.

Fabelio offers cash on delivery at lauch

Fabelio offers cash on delivery at lauch

As Indonesia is riddled with infrastructure problems and a large population of unbanked — which in itself presents huge opportunities for startups in other verticals — it’s offering a cash on delivery option at launch, by now standard practice for any new online-to-offline business in the country.

Following in the footsteps of giants

“We believe every one in Indonesia, rich or poor, has the right to live in a beautiful home… We are also strong believers in the idea of building your business around communities,” said Menon.

“We intend to get [the] interior designer community on board, engage them, and encourage them to be our main supply of designs, which further will be curated by our in-house designers,” he added.

The team hopes that because of successful case studies in markets like India (Urban Ladder) and Brazil (Oppa), it will be able to get early traction and raise follow-on investor interest to take it the next level.

Is Fabelio destined to end up a Sequoia-backed giant? Let’s wait and see.

Customers can touch and feel Fabelio’s products at Conclave, at Jalan Wijaya 1, Kebayoran Baru, Jakarta.

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