TOKYO — Bukalapak, one of Indonesia’s leading e-commerce platforms, debuts Friday on the Indonesia Stock Exchange in Jakarta, becoming the first unicorn — a startup valued at more than $1 billion — from the Southeast Asian country to go public.
Bukalapak offered 25.7 billion shares, or 25% of the post-IPO company, at a price of 850 rupiah per share in late July, which calculates to it raising 21.9 trillion rupiah ($1.5 billion). It marks the Indonesia Stock Exchange’s largest initial public offering, beating the previous 12.2 trillion rupiah raised by major coal miner Adaro Energy in 2008.
A simple calculation puts the value of the company at $6 billion.
Bukalapak’s IPO means Indonesia’s four original unicorns, the spearheads of the country’s burgeoning digitalization — Gojek, Tokopedia and Traveloka being the other three — will eventually become publicly traded, a landmark in the development of the country’s tech sector.
GoTo, Gojek and Tokopedia’s merged entity, is aiming to go public in the U.S. and Indonesia, while Traveloka is preparing for a listing in the U.S. via a special purpose acquisition company (SPAC).
Bukalapak’s IPO “is definitely a win for the Indonesia Stock Exchange,” said Swarup Gupta, industry manager at the Economist Intelligence Unit, adding that with two of the other three other unicorns in the country also expected to go public in the country, it could boost the stock exchange’s market capital by 8% to 10%.
“There is a captive group of local young retail [investors] … if there is a wave of unicorn listings they could move from one listing to another and sustain the momentum, which means the IDX can tout itself as a good local alternative to the listing of many of these firms,” he added.
Bukalapak was founded in 2010 as an e-commerce platform but has since branched into other services, namely Mitra Bukalapak, which helps digitize the country’s mom and pop stores known as warung. It enables the shops to carry out one-stop procurement of products on an app and to sell digital goods, including phone credits and data.
Its financial statement released before the IPO shows that of the 1.3 trillion rupiah in revenue it booked in 2020, 14.7% came from the Mitra business and 76% from the online marketplace.
Bukalapak has earmarked 66% of its IPO proceeds for the e-commerce business, a sector that is expected to see cutthroat competition going forward.
Singapore-based Sea, through its e-commerce arm Shopee, has gained a strong foothold in Indonesia, while Tokopedia 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.
Meanwhile, 15% of the IPO proceeds will be used for the Mitra business, which is also likely to face increased competition. Gojek and Tokopedia run similar businesses, while Shopee also started its own warung digitization service last year, albeit without the one-stop procurement aspect.
Grab is another player in the space, but it has partnered with Bukalapak’s largest shareholder, a subsidiary of local media conglomerate Emtek, to set up a program for digitizing micro, small and medium-size enterprises (MSMEs) with Bukalapak.
With competition in both e-commerce and warung digitization set to intensify, “Bukalapak will likely continue with its aggressive user acquisition efforts after the fundraising,” said Patrick Stokvis, vice president of research company Third Bridge.
And “at the same time, players such as Shopee and Lazada will not shy away from competition and will most likely engage in extensive cash burn to secure their existing market share,” Stokvis added.
Bukalapak has yet to turn a profit, posting a net loss of 1.3 trillion rupiah in 2020, but “what’s important isn’t [Bukalapak’s] ability to directly show profitability,” Stokvis said, “but their ability to give investors comfort around what the road map to profitability is.”
The company’s largest shareholders are the Emtek subsidiary, China’s Alibaba-affiliated Ant Group and Singapore sovereign wealth fund GIC. After the IPO, they will hold 23.93%, 13.05% and 9.45%, respectively.
Other investors include U.S. tech giant Microsoft and Standard Chartered Bank.