JAKARTA -- Japan's SoftBank said Wednesday it will lead a $100 million investment in online retailer Tokopedia, in what promises to be one of the biggest deals ever for an Indonesian startup.
Softbank's U.S.-based subsidiary SoftBank Internet and Media Inc., or SIMI, will lead the financing, along with SoftBank's investment fund SB Pan Asia and Silicon Valley-based venture capital company Sequoia Capital. The deal is expected to be concluded in mid-December. A spokesman for SoftBank declined to comment on the size of individual companies' investments.
The stake purchase follows a string of acquisitions by SIMI, which has only been in business since September and was created to direct SoftBank's overseas expansion in digital media. SoftBank hired Nikesh Arora, a former senior vice president at Google, to head SIMI. The company has previously announced plans to buy Korean online video site DramaFever and Hollywood movie producer Legendary Entertainment.
"The growth potential for online marketplaces particularly stands out in Indonesia and since their founding, Tokopedia has seen remarkable growth with their innovative business model," Arora said in a press release. "Leveraging synergies with our network of Internet businesses, we are confident we can help Tokopedia's success in the Indonesian market."
SIMI and Sequoia Capital plan to send representatives to join Tokopedia's board of directors.
Similar to China's Alibaba, Tokopedia operates an online marketplace, a website that allows individual vendors to sell products online. The five-year-old company is already backed by several investors, including Japanese Internet player CyberAgent, which in 2011 reportedly invested $700,000 for a 10% stake. SB Pan Asia made its first investment in Tokopedia last year.
The latest deal's large price tag underscores the strong appetite for a piece of Indonesia's young Internet companies. The local startup industry has yet to offer a big success story but is nevertheless catching the eye of foreign investors, thanks to rising smartphone sales in the country.
Silicon Valley-based venture capital firm Fenox Venture Capital recently partnered with Indonesian mobile operator Telekomunikasi Indonesia to invest $200 million in local startups. SoftBank has separately joined with Indosat, another local mobile operator, to launch a $50 million venture fund.