Exclusive: Indonesia’s online retailer Bhinneka revises IPO plan, may go public in 2018

Bhinneka
Photo: Bhinneka's Facebook page

PT Bhinneka Mentari Dimensi, Indonesia’s oldest online retailer, has revised its initial public offering (IPO) plans and may go public as soon as next year, its CEO told this portal.

“We are looking at an IPO earlier than our announced target of 2020. We may look at 2018 and plan to raise not more than $100 million through the IPO,” said Bhinneka Mentari Dimensi CEO Hendrik Tio.

Earlier this year, the company had announced that it plans to sell 30 per cent of its shares in an IPO in 2020, and raise funds to expand its business.

“I think our brand is more recognized in Indonesia and it makes more sense to list here now soon. Next year, we may see many companies tap the IPO market. Maybe after we expand ourselves in other regions, we might think of a dual listing but we still haven’t confirmed our plans yet,” Tio told this portal in an exclusive interaction.

Bhinneka is an O2O (online to offline) e-commerce startup specialising in computers and IT products, communications goods, and consumer electronics. The O2O model allows users to buy online and choose to either get their goods delivered to their homes or pick them up from physical kiosks.

Tio co-founded the startup 23 years ago in a small rented home in Jakarta with a team of 12. The Indonesian firm then started creating an offline store network in 2004 and today sells through both its website Bhinneka.com and physical retail stores. Its last known funding round was in November 2015 when it raised Rp 300 billion ($22 million) from local venture capital firm Ideosource.

The e-commerce firm had initially targeted to go public in 2018 but later deferred its plan to 2020.

Bhinneka claims to cater to over 390,000 visits from the end-consumers but is largely focused on its business-to-business (B2B) model where it sells to small and medium enterprises, ministries and provincial governments. Its corporate customers contribute almost 75 per cent to its revenues, and the company is planning to add more services for its corporate clients.

Bhinneka is present in 32 cities across Indonesia and its expansion plans include a special focus on the island of Java. The company claims to be profitable and is looking at high double-digit growth in the next two year, Tio said.

Outside of China and India, Indonesia is the hottest e-commerce market in Asia; it is expected to grow from $8 billion in 2016 to $65 billion by 2020. Today, the strongest-funded e-commerce player in the country is Tokopedia, backed by Chinese tech giant Alibaba which invested $1 billion in the company this year.

Indonesia saw its first ever startup go public this year as O2O e-commerce firm Kioson raised 45 billion rupiah ($3.3 million) by selling 150 million shares. Its offering was oversubscribed more than 10 times.

Next to follow suit was PT M Cash Integrasi (MCI), the digital kiosk firm, that raised $22 million in its IPO. Owned by publicly-listed investment firm Kresna Graha Investama, MCI saw private equity firm PAG Asia Capital and Maybank Asset Management among its anchor investors. These two IPOs are seen as paving the way for more tech startups to consider a listing on the local bourse.