Top Position: Uncovering the Ins and Outs of Traveloka's Business (Part 2 of 2)

Part 1 presents Traveloka's initial journey and its development from flight ticket choices to many things beyond that.

It was an ups and downs moment for Traveloka officials.

In 2018, Derianto Kusuma resigned from his position as Chief Technology Officer and left the company citing "a clash of aspirations."

Then, travel restrictions in 2020 caused bookings to be halted during the pandemic, jeopardizing the survival of the company. Traveloka had to lay off around 100 people, or about 10% of its workforce, by April. In August, the total refund reached almost 100 million US dollars. However, a quick turnaround to new services offered a way of life, and Traveloka was able to do it as a company.

Currently, Ferry Unardi is still at the helm as CEO, with Albert remaining on the board and overseeing day-to-day operations as one of the company's founders. Other senior officials include former BCG consultant, Caesar Indra, president; seasoned entrepreneur Alfan Hendro, COO; and the CTO, Ray Frederich, with around 20 years of experience in technology companies and global consulting firms.

The pandemic isn't over yet, but Traveloka has proven that they can get through situations that boggle businesses of all sizes. Officials say the company is now emerging to be "stronger" than it was before the coronavirus swept across the globe, and is gearing up for a "ticker symbol" in the coming months.

Survive then rise

In 2020, when travel bookings faded overnight and refunds were piling up, Traveloka needed cash — as fast as it could. Leveraging one of its fintech services, the company started a "Buy Now, Stay Later" campaign, where users can pay for hotel vouchers and use them at a later date. Traveloka Xperience organizes online activities such as cooking classes with professional chefs. Live streaming flash sales and live tours provide a pleasant distraction for those cooped up at home, perhaps planting ideas for vacation destinations when international travel is again allowed.

All of these initiatives have made Traveloka survive in critical times. Now, with easing lockdown in Southeast Asia, platform traffic is increasing to its pre-pandemic situation.

More broadly, the company's core business, travel, is gradually recovering. Traveloka's transaction volume is now at 50%, according to Traveloka's head of corporate communications, Reza Juniarshah.

Traveloka remains agile in 2020 when transactions are eroding. They offer a variety of new products to maintain cash inflows. Documentation by Traveloka.

“Since July last year, recovery has been consistent across all of our markets, particularly in Thailand, Vietnam and Indonesia. With the successful implementation of COVID-19 management measures in Thailand and Vietnam, consumer confidence in travel is increasing. In Indonesia, domestic travel is on the rise, especially with the rising trend staycation which will gradually contribute to the recovery of Indonesia's tourism sector," said Reza.

Making it through the pandemic and bouncing back in the last few months has brought a breath of fresh air to Traveloka. The company is one of the few Southeast Asian tech powerhouses competing for an IPO in New York in 2021. Earlier this year, Ferry told Bloomberg that the company was reviewing the path to going public. their early investors, Willson Cuaca, co-founder and managing partner of East Ventures, welcomed the plan. The company's track record through pandemics proves that Traveloka is mature enough to see its shares publicly traded, according to Willson.

Getting ready to go to the stock exchange

“Traveloka is ready to go public this year and 2021 is the right time. Their response to the crisis has worked well since last year. By the end of 2020, they have achieved profitability and as the world recovers after vaccination, I believe Traveloka is also in a good position to make a strong recovery,” said Willson. Traveloka currently has a market value of approx. USD 3 billion, but Willson believes the figure "should be worth much higher than expected".

Herston Powers from 1982 Ventures also believes that 2021 is the right time for Traveloka to list its shares on the public market. With the company's profits and the performance of Sea Group's shares as a guide, there may not be a better time than this year for Traveloka and other Southeast Asian technology companies to move to Wall Street.

“The window is wide open and companies have several paths to the exchange, such as traditional IPOs, SPACs, or direct listings. We fear the IPO exchange will close before we see a meaningful wave of exits from the region,” said Herston.

Herston added that US investors are betting on global travel and hospitality to increase rapidly. “Airbnb's IPO and stock performance demonstrates investor interest in the sector, and we hope this enthusiasm spreads to Southeast Asia and South Asia. Consumers in fast-growing emerging markets, such as Indonesia, have become accustomed to travel and recreation, and this trend will not stop even if there was a pause at the start of the pandemic.”

Traveloka has raised a total of USD 1,2 billion in six rounds, according to Crunchbase. This number includes JD.com, Sequoia Capital, and Hillhouse Capital Group as investors. In 2018, the unicorn company quietly acquired three of its rivals — PegiPegi in Indonesia, Mytour in Vietnam, and TravelBook in the Philippines — from Japanese firm Recruit Holdings for USD66,8 million. This move gave Traveloka a strong foothold in Southeast Asia and is now leading the OTA industry in the region.

The company has also invested in several regional startups, such as the insurtech platform PasarPolis as well as loyalty and marketing platform Member.id in Indonesia, event technology company PouchNation Singapore, and Vietnam POS software developer KiotViet. Traveloka is one of two Indonesian unicorns that have a strong presence in the region (the other is Gojek), pinned prestige when heading to the exchange.

“Momentum is very important for Traveloka, because the capital market is all about timing. You need institutional investors to be in risk mode. If the market crashes, no one will go out for an IPO,” said Herston. "Beyond major market corrections or other pandemics, we are very optimistic about Traveloka's prospects as a public company."

Traveloka is reported to have held discussions with several blank check companies, including newly formed entities such as Bridgetown Holdings and Provident Acquisition. However, the company has not disclosed the details of its IPO preparations. Traveloka officials expressed their optimism for the company's future on various occasions. Making it through the pandemic relatively unscathed is an important achievement. Now, the company must prove that they are mature enough to follow the path first opened by Singapore's Sea Group and move to New York.

-This article was first released by KRASIA. Re-released in Indonesian as part of the collaboration with DailySocial