Indonesian e-commerce unicorn Tokopedia has made a strategic investment in last-mile delivery company SiCepat to boost its logistics capabilities, according to multiple people familiar with the development.
The investment, DealStreetAsia’s sources said, was sealed last year as part of SiCepat’s Series A funding round, in which the company raised a total of $50 million – one of the largest Series A rounds sealed in the region.
In the round, Tokopedia is learnt to have co-invested with Kejora InterVest Star Growth Fund and Barito Teknologi, the investment arm of Indonesia’s petrochemicals major Barito Pacific. In the funding announcement in April last year, Kejora InterVest and Barito were named as investors in the round, while Tokopedia was not.
SiCepat denied receiving an investment from Tokopedia.
The Jakarta-based online marketplace, meanwhile, did not respond to DealStreetAsia’s query.
Interestingly, the deal with SiCepat marks Tokopedia’s second investment in a last-mile delivery startup. Earlier, the e-commerce company had teamed up with local conglomerate Triputra Group and China’s SF Express to set up a last-mile delivery platform, Anteraja.id, with an initial investment of $50 million.
Both SiCepat and Anteraja compete with a host of other similar delivery players such as JNE, JnT Express and Ninja Express in Indonesia. Tokopedia, for its delivery service, works with almost all the major delivery players in the country.
In October last year, a few months after the announcement of the funding raised by SiCepat and the launch of AnterAja, Tokopedia hinted at a deeper tie-up with SiCepat when it posted educational content on its website, calling on sellers to activate and take advantage of the services offered specifically by SiCepat and AnterAja on its platform.
Founded in 2014, SiCepat caters to e-commerce and online merchant requirements and offers couriers, warehouses and air and cargo delivery across the archipelago. In an interview with DealStreetAsia in September last year, SiCepat said its services cover 99 per cent of cities in Indonesia and support more than 400,000 package deliveries on a daily basis in the country.
Its growth is attributed to the capital it has received from Kejora Ventures since its seed round. The Indonesian VC firm injected $3.5 million seed investment into SiCepat in 2017, before topping up, through its Kejora-InterVest Star Growth Fund in the company’s $50 million Series A round last year.
According to sources, SiCepat Express shares the same holding company with a few other newer startups, including fulfilment centre provider Haistar.
One of our sources said that Tokopedia’s deal with SiCepat could also involve a strategic investment by the unicorn in Haistar, which was founded and led by former SiCepat chief commercial officer Donny Maya Wardhana.
SiCepat declined to comment on its affiliation with Haistar, while Haistar did not respond to DealStreetAsia’s query.
A closer look at Tokopedia’s website shows that the company has been quietly working in partnership with Haistar since May last year, around the same time SiCepat closed its Series A round.
Tokopedia uses Haistar’s expertise and technology to roll out its own fulfilment service called TokoCabang. In the terms and conditions for TokoCabang, Tokopedia says that its fulfilment service will be provided by a partner by the name of PT Bintang Dagang International – the legal name of Haistar.
Interestingly, AnterAja seems to have also set up a fulfilment arm called TitipAja, which is also mentioned as a fulfilment partner in the terms and condition for TokoCabang.
The investment in SiCepat and AnterAja demonstrates the strategic importance Tokopedia places on developing logistics capabilities in order to strengthen its position in the market and fend off stiff competition from rivals Shopee, Lazada, and Bukalapak – all heavily funded and members of the prestigious regional unicorn club.
The logistics play also suggests that Tokopedia is taking a leaf out of the book of its Chinese backer and fellow e-commerce giant Alibaba, which owns a majority stake in logistics company Cainiao.
According to Jianggan Li, founder and CEO of venture builder and investment consultant Momentum Works, many e-commerce firms choose to work with third parties for their logistics needs, as this space is “hard, asset-heavy, low margin work where few can do it very well at scale.”
However, he observed that big e-commerce players, such as Alibaba, always want to control at least the customer (and data) side of logistics – hence the stake acquisition in logistics companies. This, in addition, can exercise pressure on logistics companies to not work with, or reprioritise other e-commerce platforms.
“That said, minority investment often does not give you the leverage and control, especially in a competitive environment. Anything bigger than minority, meanwhile, will make it hard for the investee logistics company to get orders from other platforms (think about Lazada Express). So it is a precarious balance players need to strike,” he added.
For Tokopedia, the investment in SiCepat last year marks another strategic deal in a year which has seen it indulge in an investment and acquisition spree. In June, it announced the acquisition of wedding marketplace Bridestory, and activities marketplace Parentstory. DealStreetAsia has also previously reported about Tokopedia’s deal talks with agritech startup Sayurbox and used phone e-tailer Laku6 for possible investments, though deals were not confirmed by the e-commerce giant.
In an interview with Reuters in July last year, however, Tokopedia founder and chief executive William Tanuwijaya had said that Tokopedia was in final talks to invest in an agritech startup that works with farmers, while also buying stakes in smaller marketplaces offering everything from wedding services to secondhand phones.
Tanuwijaya also said that Tokopedia will be investing in two logistics companies as part of an effort to speed up delivery and slash shipping costs in the world’s biggest archipelago.