Indonesian e-commerce unicorn Bukalapak is eyeing an initial public offering (IPO) on the Indonesia Stock Exchange (IDX) as early as the third quarter of this year, according to people familiar with the matter.
The marketplace is also weighing a US listing via the special purpose acquisition company (SPAC) route, as first reported by Bloomberg. Bukalapak could be valued at $4 billion to $5 billion in a potential SPAC merger, the report added, citing sources.
Multiple sources told DealStreetAsia that the SPAC merger will likely happen after the company lists in Indonesia, in order to save on tax costs associated with pursuing an IPO in the US.
Bukalapak has appointed Goldman Sachs as advisors to run the global market process, and Mandiri Sekuritas for the Indonesia offering, according to one of the sources mentioned above.
Bukalapak’s spokesperson has declined to comment regarding the IPO progress.
The Indonesian firm has already filed the documents with the Indonesia Stock Exchange and is likely to offer at least 10-15% of shares, worth around $350 million, through an IPO in Indonesia, the source added.
“Bukalapak is actively weighing both options, local listing and US listing via SPAC, taking into account parameters such as cash burn, valuations, and tax implications [of pursuing an IPO],” said a source.
Bukalapak currently claims to have 6.5 million online sellers, 7 million Mitra Bukalapak or agent partners, and 100 million users.
Per a company blog post, during 2020, Bukalapak recorded an 80% increase in EBITDA and a rise of over 130% in its transactions compared to the same period last year. This was supported by the development of features and services within its marketplace and O2O platform.
Another source says Bukalapak’s burn rate could be lower than its peers in the local market. “At a cash burn of $5-6 million per month, Bukalapak’s GMV has reached $10-11 billion in 2020,” the source added.
Bukalapak competes with deep-pocketed giants including foreign players such as Alibaba-backed Lazada and Sea’s Shopee, as well as local peer Google-backed Tokopedia.
Unlike Tokopedia and Shopee that compete in the large metro cities in Indonesia, Bukalapak’s strength is its penetration in second- and third-tier cities. It partners with traditional stalls (warung) and individual agents to sell virtual products and financial services such as tax settlement, money transfer, gold savings, and others.
For deepening its financial services offering, Bukalapak is collaborating with strategic backer Standard Chartered Bank. The partnership will see StanChart provide digital financial services to Bukalapak’s customer base of over 100 million users and 13.5 million sellers.
Between November 2020 and January 2021, Bukalapak secured a total of $66.3 million in the Series G round from US tech giant Microsoft, Standard Chartered Bank, Singapore’s GIC, Naver Corporation, and Emtek’s PT Kreatif Media Karya, DealStreetAsia learnt from the company’s filing.
Founded in 2009, Bukalapak achieved the $1-billion valuation mark in 2017. It has amassed a total capital of approximately $500 million from a group of prominent investors such as Emtek, GIC, and Shinhan.
Indonesia is home to six unicorns, including ride-hailing giant Gojek, online travel agent Traveloka, digital payments firms OVO and GoPay, and the online marketplaces Tokopedia and Bukalapak.
Many of these unicorns are busy lining up IPO plans. Gojek and Tokopedia are discussing various options to ultimately list the combined entity in Jakarta and the US, with a target valuation between $35 billion and $40 billion, Bloomberg reported. Traveloka plans to list the online travel agent in the US this year through the SPAC route.
Meanwhile, the Indonesia Stock Exchange is said to be weighing options to allow a dual-class share structure as it seeks to draw listing interest from several of the country’s IPO-ready unicorns. Under this structure, founders enjoy super-voting rights that allow them complete freedom and flexibility to steer the enterprise while being a public-listed entity.