Teddy Oetomo on CSO Position, M&A Strategy, and Potential IPO Bukalapak

One of the new people recruited by Bukalapak to the management this year is the Chief Strategy Officer (CSO). Teddy Oetomo. Having a PhD in Economics from the University of Sydney, Teddy has a dozen years of experience in the financial industry, in particular investment banking.

In an article in 2007, Harvard Business Review explain the position of the CSO as a “mini CEO”, someone with a mandate, credential, and the desire to carry out executions as well as advisors.

DailySocial had the opportunity to discuss further about what this position means, why Teddy is now active in the digital industry (especially through Bukalapak), and how Bukalapak's strategy is to synergize with third parties (including in the M&A strategy).

Teddy said that unicorn startups in Indonesia have started to consider the position of CSOs as important. Not all roles can be held by a CEO, especially now that his business is not only in one line of business.

"If the company is big, it's impossible for all of them role held by one person. It's the same at Bukalapak. [..] Strategy sometimes requires silence, take a step back, Do not disturb. Otherwise, you can't think," he said.

Teddy mentioned corporate finance and corporate communications be part of it. This includes the recent M&A. This year, Bukalapak began to aggressively implement the M&A strategy, although the method used was quite unique.

Become a part of Bukalapak

Teddy admitted that he had known this significant investor in the startup founded by Achmad Zaky, M. Fajrin Rasyid, and Nugroho Herucahyono for a long time. According to him, Bukalapak is the type of company that offers real time results for the results of its work, in contrast to multinational companies which do require time to obtain overall results.

"So maybe personal satisfactionit's different. In addition, with experience in the capital market sector, equity side and debt side, in all the preparatory and executive phases for the issue and placement of financial instruments; For 17-18 years, it's time for me to find new experiences," said Teddy.

Teddy continued, "Bukalapak always mentions itself empowering SMEs. Are we really empowering SME?"

Bukalapak's focus is now starting to shift to the O2O business, utilizing Bukalapak's network of 300 thousand partners throughout Indonesia. Teddy makes an analogy for this O2O business as empowering SME 2.0.

"Bukalapak not uncle [just talk -ed]. It really is passion the Co-Founders want Empowered SME in a manner part. It's not easy to teach shopkeepers [using this platform]. Not only patience, it also requires dedication. Yet they did it. That's probably a huge differentiator for me."

Synergy strategy

Teddy said there is no specific strategy in synergizing with other parties. When they want to acquire other parties, Bukalapak is said to look from the business side, contracts, and the people behind the business.

"Rule to be successful at startup is dynamic. All the companies we see [want to collaborate], have different interests. Everything custom made. Our job is how to make one plus one more than two."

Related corporate action against Prelo, Teddy said, "Prelo kinda special case, because it is a company that has complementary targets, has a founder who skillits different. Therefore, Prelo's Founder, Fransiska PW Hadiwidjana, became Head of Business at Bukalapak [in charge of the O2O business]."

"It's multilayer reason [when taking action against Prelo]. shareholder Prelo get fee, but they are still there [in the company structure]. This is a complex structure. I don't have the details disclose [including the question of Bukalapak's ownership in Prelo], because if [competitors] know about the structure, then they know that Bukalapak wants it what are you doing. Maybe 1-2 years from now disclose," he continued.

Teddy said this year Bukalapak had done 3 deal, with a target by the end of the year to reach 5 deal. He made sure Prelo still exists as a business, but did not want to go into details about how it operates.

"The structure is purposely made unique so that win-win for all parties."

Potential funding or IPO

Teddy said, if without any growth, Bukalapak can profit within the next 18-24 months. Funding, if needed, will be adjusted according to company direction to support growth, both organic and inorganic. Inorganic in this case is in the form of M&A.

Bukalapak is said to have tried to do use case this scenario last year. As a result, the company only grew by 100%, while currently they are growing by 200%. Teddy made sure they had it ready cost structure to ensure all scenarios can be met.

Regarding the IPO, he said, "Are we [Bukalapak] definitely an IPO? Definitely an IPO. When? When we are ready. [..] If we have an IPO, the public will hear about the O2O [business scheme] two years ago, not two months ago, because it is an obligation to disclose information. That's what makes it difficult, while our industry still has a lot of guerrillas. If it's already established [meaning] it's good, if it's still a trial and suddenly someone competes, the innovation doesn't even happen. Both lose because [could] be trapped price wars etc."

"We will IPO when we candeploy our innovations are confident [able to compete] whenever there is a competitor."

Outstanding O2O

O2O-based business scheme that has been running since two years ago now contribute 20% GMV for the company. Teddy denied that this scheme interfered with traditional distribution schemes. Instead, he claims that FMCG distributor companies are competing to partner with Bukalapak.

"They work together because information flow that Bukalapak has [for distribution distribution] is accurate. They can run their operational capacity optimally [based on the distribution data] with cost the lower one. That's why many distributors talking to us. Actually we are empowering the distributors, not disrupting."