Indonesia’s Bukalapak said to increase IPO target to over $1b on strong demand

Logo of Bukalapak, an Indonesian e-commerce firm, is seen outside its headquarters in Jakarta, Indonesia, June 16, 2021. REUTERS/Willy Kurniawan

Indonesian e-commerce firm Bukalapak is targeting raising more than $1 billion in its IPO, 25% more than previously planned, on indications of strong investor demand for the country’s first tech unicorn listing, two sources familiar with the matter said.

Bukalapak, which counts Singapore sovereign investor GIC and Microsoft among its backers, is set to be the biggest local listing in 13 years and the largest ever by a startup in the Southeast Asian country.

The expanded initial public offering (IPO) target size shows investors are keen to get their hands on relatively rare technology sector offerings in a region that boasts a growing consumer class.

It also underscores the companies’ hunger for capital as they pursue rapid growth. Regional ride-hailing-to-payments firm Grab sealed a record $40 billion merger with a U.S. special-purpose acquisition company for a U.S. listing.

The books for Bukalapak’s IPO will open this week for about 10 days, and will be followed by a listing in August, said the sources who declined to be identified as they were not authorised to speak to the media.

“We are constantly exploring opportunities for the company to continue to grow and develop financially. However, for now, we have not made any decisions,” Sufintri Rahayu, vice-president for corporate affairs at Bukalapak, said in an email, when asked about the IPO.

Reuters reported last month that the IPO could raise between $500 million and $800 million depending on investor demand and market conditions.

The sources said the 11-year-old startup is likely to be valued at more than $5 billion, doubling its valuation from two years, and is set to sell a stake of about 20% in the IPO.

They said investor demand is mainly from local and regional funds, with interest also coming from newer tech-focused U.S. investors.

LACKLUSTRE IPO MARKET

With a population of 270 million, Southeast Asia’s largest economy has one of the world’s fastest-growing online shopping sectors and, like elsewhere, the sector has got a boost from stay-at-home consumers during the COVID-19 pandemic.

Bukalapak, which in Bahasa means opening a kiosk in the market, trails leaders Tokopedia, Sea Ltd’s Shopee and Alibaba’s Lazada in Indonesia’s $40 billion e-commerce market measured by gross merchandise value.

Its listing comes ahead of the planned IPO of GoTo – the merged entity of Tokopedia and ride-hailing and payments firm Gojek. Sources have said GoTo is looking to raise at least $2 billion in a pre-IPO funding in the next few months, which will be followed by an Indonesian listing.

“If Bukalapak has a successful IPO, it would increase the confidence of other unicorns to list in Indonesia,” said Iqbal Darmawan, a Jakarta-based partner at HHP law firm.

Bukalapak and GoTo’s planned debuts will boost Indonesia’s lacklustre IPO market, which took a further hit in the pandemic, with the total value raised via IPOs falling by more than half in 2020 to $470 million, according to Refinitiv data.

So far this year, the number of listings has halved from 2020 but the value raised has increased to $603 million.

“Large funds and similar type of investors are attracted to tech IPOs as the deal sizes are huge,” said Darmawan.

Other investors in Bukalapak, which says it has more than 100 million users, include local media conglomerate Emtek and Standard Chartered’s investment arm.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.