Digital kiosk firm M Cash Integrasi (MCI) is planning to invest in digital printing service provider Dua Empat Print (24Print.id), DEALSTREETASIA has learned. MCI will be taking a 25 per cent equity stake in 24Print.id for an undisclosed amount.
24Print.id produces high-tech laser printing machines that could be installed at public places such as schools, libraries, or cafes, which allow users to print documents via e-mail, website, Google Drive, or USB.
“MCI sees great synergetic value in 24P.id, given that the two companies have adopted the same technology, business model, and deployment strategies,” said the MCI management in a statement sent to DEALSTREETASIA.
MCI can generate any physical cards, including mobile SIM and e-money, with automatic registration. It also provides other services such as phone credit top-up, routine bill payment, mall directory, advertisement (co-branding), voucher and promotions, flash sales points, e-commerce transactions and other digital products.
MCI’s backer Kresna Graha Investama, through its unit Kresna Usaha Kreatif (KUK), had previously acquired 35 per cent stake in 24Print.id in October last year. In April this year, Kresna bought a 17.6 per cent stake in MCI.
Kresna closing three more deals
Staying true to its digital dreams, Kresna will soon close three more deals — a joint venture, an acquisition, and an investment in a digital company.
“We are in the process of due diligence (with these companies). It’s almost final,” a Kresna director told this portal.
Kresna has been on an aggressive acquisitive streak since 2015, focusing on tech-based startups to create a “comprehensive digital ecosystem”, as its board members are wont to say.
Since then, the company has purchased or set up joint ventures with as many as 10 companies, with deal sizes ranging from $100,000 to $10 million.
The company funds these purchases using its own cash, and as such has been holding off dividends.
Kresna is by far the only financial-digital hybrid company listed on the Indonesian Stock Exchange (IDX).
Another public company pursuing digital expansion in the country is Emtek, Indonesia’s second largest media group, which recently formed a partnership with Alibaba’s Ant Financial to strengthen payment services.
Both Emtek and Kresna are competing with tech-based venture capital firms in scouting strategic digital startups, but unlike the latter, these firms are more interested in consolidating their investments rather than looking for exits.
Kresna’s long-term vision, for instance, might be to increase stakes instead of selling them.
A Kresna director has said that the company has had a talk with MCI founders about their vision “far in the future”, hinting that Kresna might be eyeing larger control.
First digital firm IPO
Recently, MCI announced a plan to raise up to Rp250 billion ($18.7 million) for expansion via an IPO, as reported first by DEALSTREETASIA.
The public offering will see MCI releasing new shares equivalent to 20 per cent of its enlarged capital.
Based on the share sale, the valuation of the company can be pegged at about $93.5 million. Kresna Securities will act as an underwriter, and hopeful anchors have started to express interest.
If successful, MCI will be Indonesia’s first pure digital company to go public.
“We are not burning money”
Suryandy Jahja, director at Kresna and MCI, said that MCI is targeting to book Rp800 billion in revenues this year. The company has been profiting since last year — when it clocked Rp380 billion in revenue — and will continue to do so.
“So we are not burning money here,” he said, referring to other digital startups that have been rumoured to be still suffering losses, and depending only from fundraising to keep operations afloat.
MCI’s business model allows for diversified revenue streams such as margins per transaction (Kresna takes 2-4 per cent of each transaction), discount promotions, ads, and many more.
In 2020, MCI will have 10,000 kiosks purely driven by organic growth, Jahja claimed, which will then boost profit even more.
“It will grow exponentially,” he stated.
MCI is by far the only company of its kind in Indonesia, hence faces little to no competition for now. Other offline to online (O2O) e-commerce players in the market — including Kudo or Go-Jek with its Go-Mart feature — rely more on apps on tablets or smartphones.