Indonesia’s Bukalapak secures strategic investment from Microsoft

REUTERS/Mike Blake/File Photo

Indonesian e-commerce unicorn Bukalapak has secured a strategic investment from tech giant Microsoft, the US company said in an announcement on Tuesday.

According to a report by Bloomberg, the deal is part of a $100 million fundraising round by the Jakarta-based company. The funding round was first reported by DealStreetAsia in July.

The partnership will leverage Microsoft’s expertise in building a resilient cloud infrastructure to support Bukalapak’s services for more than 12 million micro, small and medium enterprises (MSMEs), and 100 million customers.

“This partnership signals a deep collaboration with Microsoft on an array of technology projects that will transform the technology-driven commerce solutions and operations solutions in Indonesia,” said Bukalapak CEO Rachmat Kaimuddin.

Among other things, the collaboration will see Bukalapak adopt Microsoft Azure as its preferred cloud platform to support its more than 6 million online merchants, 6 million offline merchants, and 100 million customers.

Beyond that, the two companies will explore opportunities to help make the digital world relevant for every individual daily, while also providing digital skills training for Bukalapak employees and their merchants.

“Through this partnership, merchants and consumers will have more efficient and reliable buying and selling experiences, which in turn creates business resilience and helps in accelerating growth in the Indonesian digital economy,” said Microsoft Indonesia president director Haris Izmee.

Well-funded

Founded in 2009, Bukalapak is one of five unicorns born out of Indonesia. It passed 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, which has helped it become one of Indonesia’s biggest e-commerce players, while also offering financial services for its users, such as gold and mutual funds investments, bill payments, and credit services.

Bukalapak competes with deep-pocketed giants including foreign players such as Alibaba-backed Lazada and Sea’s Shopee, as well as local peer Tokopedia, which recently roped in Google as a strategic backer. Google agreed to invest $350 million in Tokopedia together with Temasek Holdings, as reported by Bloomberg.

According to a corporate filing obtained by DealStreetAsia, the new round will not be the first investment since Bukalapak’s last announced funding round in October 2019, when the company raised fresh capital from GIC and Shinhan.

Based on the filings, Bukalapak, in March, received investment from a company called API Investment, understood to be a subsidiary of existing backer Ant Group, in exchange for 30,303 of its Series F shares. In May, API bought additional 45,454 shares.

The recent deals with API, which has not been publicly announced, marked the first funding raised under the leadership of Rachmat Kaimuddin, a professional banker with experience at a public company and a private equity firm.

Kaimuddin took the reins at Bukalapak in January this year replacing co-founder and former CEO Achmad Zaky.

Zaky’s departure was followed three months later by fellow co-founder and CTO Nugroho Herucahyono. The third, and only remaining co-founder, Muhammad Fajrin Rasyid stepped down last month to join Indonesia’s largest telecom operator Telekomunikasi Indonesia (Telkom) as a digital business director.

For Microsoft, the investment in Bukalapak comes just a month after it announced a strategic investment in Grab, another highly-valued Southeast Asian tech company. Before that, the tech titan had invested in Indian e-commerce company Flipkart. As in the deal with Bukalapak, the investments in Grab and Flipkart has seen the investees adopting Microsoft Azure as their exclusive public cloud computing platform.

It is understood that the strategic moves are part of efforts to propel Azure to catch up with Amazon’s cloud platform AWS, which is the market leader.

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.