S Korea’s Shinhan invests in Indonesia’s Bukalapak at $2.5b valuation

Bukalapak's Fajrin Rasyid at DEALSTREETASIA's Indonesia PE-VC Summit 2019 in Jakarta. Photo: Ipsita Ray/DEALSTREETASIA

Indonesian e-commerce major Bukalapak announced on Friday that South Korean conglomerate Shinhan GIB has joined the firm’s latest Series F funding round, along with a few existing investors.

Indonesia’s media conglomerate Emtek and another global institutional investor (whose name has not been disclosed) also participated in the round.

Bukalapak, which became Indonesia’s fourth unicorn last year, did not disclose the deal size or the stake that Shinhan GIB picked up but added that the funding has pegged its valuation at a whopping $2.5 billion.

Other unicorns in the country are Tokopedia, GOJEK, and Traveloka.

Bukalapak plans to use the corpus raised to facilitate its long-term plan and business strategy to expand its operation. However, it did not specify any details.

Established in 2010, Bukalapak now has 70 million active users, with over 4 million active sellers, 2 million mom-and-pop kiosks. On the business side, it has a significant number of individual agents across the archipelago’, who are referred to as ‘mitra Bukalapak’.

Apart from its core online marketplace business, the company offers a slew of products such as streaming video features, offering mutual funds and fintech products. It also allows users to purchase phone credit and pay electricity and insurance bills.

Shinhan GIB is the investment banking unit of Shinhan Financial Group or SFG that was set up in 2017 to facilitate the development of startups. SFG has total assets amounting to $143 billion and has $19 billion in market cap.

In January this year, Bukalapak had raised $50 million in series D round from another South Korean investor, Mirae Asset –Naver Asia Growth Fund, a joint venture fund operated by Mirae Asset and Naver, which operates messaging app Line.

Apart from these investors, Bukalapak also counts Singapore’s sovereign fund GIC and Alibaba’s Ant Financial among its backers.

Indonesia is an important market in Southeast Asia that is poised to witness significant growth in the years to come. According to the latest report jointly launched by Google, Singapore’s state investment firm Temasek, and Bain & Co, the country’s internet economy has recorded a growth rate of over 40 per cent year-on-year, driven by a slew of factors such as growing middle-class coupled with a rising ‘netizen’ population in the backdrop of strong domestic consumption.