Indonesian e-commerce company Bukalapak plans to offer up to 25% of its enlarged capital in its initial public offering (IPO) on the Indonesian Stock Exchange (IDX), according to a company document seen by DealStreetAsia.
The company has projected July 29, 2021, as its estimated listing date on the bourse, under the ticker “BUKA.” Should the listing go per plan, Bukalapak will become the first of Indonesia’s unicorns to list on the local capital market. It will also become the first of Southeast Asia’s current crop of unicorns to go public.
The document did not specify the amount the company is planning to raise through its domestic public listing. The company intends to use the proceeds for “working capital and general corporate purposes.”
Reuters had reported last week that Bukalapak was looking to raise as much as $800 million in its IDX IPO.
To assist with its IPO, the company has appointed UBS, BofA Securities and Mandiri Sekuritas as bookrunners; Mandiri Sekuritas, Buana Capital Sekuritas as lead managing underwriters; and UBS Sekuritas Indonesia as domestic underwriters.
An IPO for Bukalapak would open the door to a lucrative exit for its group of investors, which include Microsoft, Singapore sovereign wealth fund GIC, local media conglomerate Emtek, the investment arm of Standard Chartered and South Korean web portal Naver Corp.
Bukalapak, which describes itself as an “all commerce” platform with an online marketplace platform and an O2O MSME app as its two main business lines, claims that it has booked a total transaction value of $6 billion in 2020, and a revenue of $95.8 million, representing a 115% CAGR from 2018.
The company’s revenues are derived from three main segments – its e-commerce marketplace, Mitra Bukalapak (O2O business) and BukaPengadaan (BPI) (e-procurement business).
In its marketplace business, the company derives revenue from commissions generated through sales by merchants of physical products and sales by virtual product partners as well as from monetising marketing spend by merchants and fulfilment services.
Its O2O business sees it making money through commissions generated from sales of physical products by merchants and FMCG principals, and virtual products from Mitras (agents), as well as through the fulfilment of logistic services.
Bukalapak’s e-procurement business generates the company additional revenue from the sales it facilitates of its own products or those of its partners and is tied to the sale of physical and virtual products.
Additionally, the document suggests that Bukalapak has drastically cut its sales and marketing costs between 2018 and 2020. In 2020, the company’s sales and marketing cost stood at $12 million, down 90% from 2018.
MSME segment driving growth
Of all its operating business lines, Bukalapak will be pinning its hopes on the promise of its O2O business, which has been demonstrating the most significant growth for the company.
Declaring it as the number one O2O agent network in Indonesia tapping the country’s over 64 million MSMEs, Mitra Bukalapak’s TPV has grown 105% from 2018-2020, compared to the 65% growth shown by Bukalapak’s marketplace business in the same period.
In terms of revenue, while the marketplace business still generates the most revenue for the company as of 2020, contributing a total of $73 million, Bukalapak’s O2O business has seen the biggest growth between 2019 and 2020, up by 63%, compared to marketplace’s 29%.
Bukalapak’s foray into the offline segment came in 2017 when it launched a second app to empower the mom-and-pop shops or warungs.
The app, called Mitra Bukalapak, enables MSMEs including warungs and agents to sell virtual products like phone credit, data plans, electricity vouchers and train tickets. It has also developed a B2B marketplace function that connects warungs to principals, allowing them to replenish their stock by ordering wholesale goods on the app and have them delivered to their doorstep.
As reported by DealStreetAsia recently, Bukalapak said the company had started diversifying into categories such as electronics, fashion and motorcycle accessories, and targeting new types of MSMEs including small merchants located in malls.