Bukalapak intends to go public on US stock exchange with local IPO as precursor

It seems that 2021 will be enlivened by IPO plans from a number of Indonesian startups. After GoTo and Tiket.com, recently Bukalapak reported to have submitted an application for an initial public offering in Jakarta.

This news at the same time confirms the news Bukalapak is considering an IPO some time ago. However, representatives of Bukalapak, as reported SCMP, said that his party had not made any decision regarding this matter.

According to him, currently Bukalapak is still looking for growth opportunities and access to capital. "Our focus is to find the right strategy to become a company sustainable and create value for partners and users in the long term," he said.

If this IPO is realized, This corporate action will make Bukalapak one of the first major technology startups to go public in Indonesia. As for, DailySocial have tried to confirm this news to Bukalapak executives, but there has been no response from related parties until this news is revealed.

Bukalapak's line of investors

As summarized DealStreetAsia, Currently, there are three majority shareholders who control 61,9% ownership in Bukalapak, among others PT Kreatif Media Karya (31,9%), API (Hong Kong) Investment Limited (17,4%), and GIC Singapore through Archipelago Investment Pte Ltd (12,6%).

Overall, there are a total of 47 shareholders in Bukalapak. Of this amount, as many as 13 shareholders hold 90,46%. Meanwhile, the other 34 only hold small shareholdings, including Bukalapak Co-founder Achmad Zaky Syaifudin who controls 5,8%, Muhamad Fajrin Rasyid at 3,53%, and Nugroho Herucahyono 2,78%.

For your information, Kreatif Media Karya (KMK) is a digital business subsidiary of PT Elang Mahkota Teknologi Tbk (EMTEK), a media and technology conglomerate company owned by Sariaatmadja. Ant Group as Alibaba's parent company controls Bukalapak's shares through API (Hong Kong) Investment Limited.

Both EMTEK and API share the majority of shares in the DANA digital money platform. In addition, API owns 45% of DANA's shares through its indirect subsidiary, PT Elang Andalan Nusantara.

Furthermore, some investors use more than one vehicle to invest in Bukalapak. Take, for example, Indies Capital Partners investing through two companies, namely Komodo Indigo Investment Ltd (0,51%) and Komodo Opportunity Venture 1 Ltd (0,51%).

Then, the US-based venture company 500 Startups allocates investment through a number of managed funds, including 500 Durians II LP, 500 Durians LP, 500 Kimchi LP, 500 Startups III, and 500 Startups IV LP.

If broken down by country of origin, Bukalapak's top three shareholders consist of Indonesia at 50,96%, followed by Hong Kong in second place at 21,62%, and Singapore 16,58%.

US listing via local line predecessor

Bukalapak is also reported to have filed proposal listing to the Indonesia Stock Exchange (IDX), and is expected to be realized in early August. To that end, this e-commerce platform appointed Mandiri Sekuritas and UBS AG Indonesia as partners underwriter for listing in the country.

Meanwhile, Bukalapak also appointed Merrill Lynch to explore opportunities go public in the United States (US). The IPO plan in Indonesia is believed to be an initial effort before landing on the US stock exchange which has the potential to occur through a Special Purpose Acquisition Company (SPAC) vehicle.

Apart from Bukalapak, other startups are also exploring similar efforts through blank check company vehicles or SPACs, such as Traveloka, GoTo, Grab, and Ticket.com. Even the government has given the green light by preparing a number of relaxation. One of them is publishing dual class shares (dual class sharing).

With the IPO effort as an effort to seek access to capital, Bukalapak wants to target a wider target market, namely to remote areas. This is also done to avoid head-to-head with its two biggest competitors, Tokopedia and Shopee, which dominate the market in big cities or metropolitan areas.

Bukalapak also sees an opportunity where as many as 70% retailer in Indonesia is a family-run shop. To target this segment, they have partnered with 500 thousand warungs in Indonesia.

Especially in the Covid-19 pandemic situation, not a few business people and merchant in Indonesia who are forced to switch their services to online in order to maintain business. Multiple platforms E-commerce benefit from this accelerated digitization.

With this strategy, Bukalapak wants to adapt its tactics online-to-offline (O2O) used by giants E-commerce Alibaba Group and Amazon to a more mature market. Here, customers have the option of browsing in physical stores combined with offerings from digital platforms.