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Indonesia e-commerce unicorn Bukalapak plans to go public in July

Loss-making startup focused on small shop digitalization plans Jakarta listing

Bukalapak, an e-commerce company whose shares have risen 56% from their IPO price, is the first Indonesian unicorn to go public.   © Reuters

JAKARTA -- Bukalapak, an Indonesian startup valued at over $1 billion, will look to list shares on the country's stock exchange in July, joining fellow unicorns GoTo and Traveloka with its plans to go public.

The e-commerce platform revealed the plans in materials shown to investors in May and recently obtained by Nikkei Asia. Bukalapak said in the presentation that it intends to offer "up to 25% of enlarged capital" but did not reveal details such as how much it hopes to raise from the initial public offering on the Indonesia Stock Exchange or its valuation.

Reuters had previously reported that the company was aiming to raise around $800 million, with a valuation of between $4 billion and $5 billion, citing sources.

Bukalapak's IPO would offer an exit chance for its investors, which include the likes of local media conglomerate Emtek, China's Alibaba-affiliated Ant Group, Singapore sovereign wealth fund GIC, Microsoft and Standard Chartered Bank.

Competition in Indonesia's e-commerce space is expected to accelerate. Singapore-based Sea, through its e-commerce arm Shopee, has gained a strong foothold in the archipelago, while Tokopedia, one half of GoTo along with "super app" provider Gojek, will be armed with fresh capital for expansion after GoTo goes public. Lazada, a company backed by Chinese internet giant Alibaba, is another player looking to seize a sizable piece of Indonesia's fast-growing market for online commerce.

Bukalapak was Indonesia's third most visited e-commerce website in the first quarter of this year according to research company iPrice, behind Shopee, Sea's e-commerce brand. Tokopedia took the first spot.

Proceeds from the IPO will be used for "working capital and general corporate purposes," Bukalapak said.

The company started off as an e-commerce platform but was one of the first to move into the business of digitalizing warung -- mom-and-pop stores in local parlance -- that allows them to sell online products and services such as phone credits as well as allowing one-stop procurement. The sector has seen the entry of numerous startups in recent years with investors, both domestic and foreign, taking keen interest.

In the investor materials, Bukalapak estimates the e-warung market will reach $36 billion in 2025, from $2.9 billion in 2020.

It claims to have a 39% market share in that space and says it offers more services for warung compared with its competitors. Bukalapak also says it has a 35% market share in e-commerce beyond the large cities like Jakarta.

Bukalapak booked 1.3 trillion rupiah ($90 million) in revenues in 2020, a 25.5% increase from a year earlier, according to the presentation material. A total of 76% of its revenue came from its e-commerce business, while the e-warung business, which takes commissions from warung and merchants selling to them, contributed 14.7%. Revenue from BukaPengadaan, which offers procurement services for corporate clients, made up the rest.

The company posted net losses for the three years it showed investors, but managed to trim the red ink last year. Its 2020 net loss of 1.3 trillion rupiah was 51.7% less than the previous year.

Bukalapak's IPO decision means Indonesia's four original unicorns that have spearheaded the country's digitalization -- Gojek, Tokopedia and Traveloka being the other three -- will all eventually become publicly traded, a landmark in the transformation of the country's tech ecosystem.

The Indonesia Stock Exchange has been keen to lure tech companies to list and is contemplating IPO rule changes to accommodate them. Among such possible measures would be relaxing its profit rule requiring "operating profit at least in the last 1 financial year" as well as permitting dual-class shares, which allows startup founders and executives to retain strong control over the company.

GoTo aims to go public in the U.S. and Indonesia, while Traveloka is said to be mooting a listing in the U.S. via a SPAC, or special purpose acquisition company.

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