Tokopedia is reportedly exploring the potential of "going public" on the New York Stock Exchange through SPAC

Tokopedia's marketplace service, through Bloomberg news, is reportedly exploring the potential go public on the New York Stock Exchange through Bridgetown's Special Purpose Acquisition Company (SPAC), supported by renowned Silicon Valley investor Peter Thiel (through Thiel Capital) and Hong Kong conglomerate Richard Li (through Pacific Century Group). Bridgetown shares rose 29% after the close of the stock exchange today.

The Tokopedia spokesperson we contacted has not yet provided a statement regarding this matter.

Through openness During the IPO on October 16 last, the check company blank (blank check company) Bridgetown aims to help Southeast Asian companies operating in the technology, financial services or media sectors to go public. Bridgetown raised $550 million in public funding from the IPO.

According to the news Bloomberg, scoping go public Tokopedia is still in its early stages and if it does happen, possibly next year, it will put the company's market capitalization at $8-10 billion (110-150 trillion Rupiah).

Tokopedia is currently an Indonesian unicorn startup with the second largest valuation after Gojek. Its closest competitor, Sea Ltd which operates Shopee, had IPO on the New York Stock Exchange in 2017 and currently has a market capitalization of over $96 billion or around 10x that of Tokopedia.

Pacific Century Group is currently an investor in Tokopedia with Bridgetown CEO and SVP Pacific Century Group Daniel Wong is a member of Tokopedia's board of commissioners, according to date filing SEC S-1 Bridgetown. In Indonesia, Pacific Century Group's business is the FWD insurance company. 

The popularity of SPAC in 2020

The presence of a blank check company SPAC brings a new nuance to the way companies IPO on the stock exchanges of developed countries, especially the United States. According to the data we have obtained, there have been approximately $78 billion of public funds disbursed through SPAC so far this year on US exchanges. By comparison, only $13 billion was made public by the same method last year, an increase of about 6x.

SPAC makes it easy for companies to go public, because the IPO process tends to be long and tortuous to ensure accurate financial data and assess the integrity of its executives. Failure WeWork IPO last year is one proof of the difficulty of startups that do not adhere to principles good governance for go public.

SPAC does not have complex financial data that needs to be audited so the process tends to be easier, in a matter of weeks, not months through the IPO process.

After go public, SPAC will be merged with a private company so that the company is automatically registered immediately (direct listings) on the stock.

The pandemic conditions did not dampen the euphoria of listings throughout this year. The New York stock exchange, including the technology stock exchange Nasdaq, has been breaking record index listings throughout the year. Several IPOs of technology companies this year are also considered to have received positive responses from the market, such as Snowflake, DoorDash, and most recently Airbnb.

Tokopedia has so far raised funding from investors of $2,8 billion (approximately Rp40 trillion) according to the compilation DailySocial and Crunchbase. New company enter Google and Temasek this year into the ranks of its investors.

The presence of SPAC as a means go public provide a big wind for private investors who want to exit on the stock exchange. Nevertheless, this scheme deserves continued scrutiny to reduce the risk of failure of investors to invest, which is reminiscent of events dot com bubble 20 last year.

This year Nikola became one of the SPAC “graduates” who was in the spotlight because of his considered business practices "deceive the public". This prompted a United States Department of Justice investigation and the resignation of Founder Nikola Trevor Milton.

In Indonesia, the SPAC scheme is not yet common. The Indonesia Stock Exchange (IDX) has on several occasions continued to encourage unicorn startups to go public in a manner dual listings, on local and foreign exchanges, in order to also provide opportunities for local investors to become share owners of domestic startups.

JP Morgan in the Indonesia Equity Strategy 2021 report estimates Tokopedia to be in the #10 position for the company with the largest capitalization in LQ45 if go public today on IDX.

Co-Founder and CEO of Tokopedia William Tanuwijaya himself since last year hinted that the company would be on the floor in the next 1-2 years.