On Friday, Jakarta-based Bukalapak went public with a $1.1 bln IPO, in Indonesia’s biggest IPO in more than a decade. It received enough investor orders to cover the sale of its public equity on its launch day.
Bukalapak, whose name means ‘opening a kiosk’ in Indonesian, is the 4th largest e-commerce company in Indonesia and raised $800 million via its IPO. The company is also targeting another raise of $1.13 billion by selling as much as 25% of its enlarged capital with shares between 750 and 850 Indoneasian rupiahs per share.
The IPO created a valuation of around $5.6 billion, which is twice the level it was valued at 24 months ago. The company has received support from Singapore’s GIC, Ant Financial, as well as local media conglomerate Emtek. US tech giant Microsoft has also invested in the company.
The sale of Bukalapak’s IPO shares is open until July 19, the same time when the share price will be set. Also, the company will make its market debut on Aug. 6. Bank of America and UBS are participating as joint global coordinators and book-runners with Mandiri.
The pandemic is boosting demand in Indonesia’s $40 billion e-commerce market. The nation has a population of over 260 million, and it has become a hotspot for online shopping. Compared to its bigger rivals such as Tokopedia, Sea Ltd’s Shopee, and Alibaba’s Lazada, Bukalapak’s strategy is to focus on smaller clients.
Bukalapak CEO, Rachmat Kaimuddin, commented,
“Our business is focused on micro, small and medium-sized enterprises. They are the prime movers in the Indonesian economy…the opportunity to digitalize them and cater to underserved markets, especially outside the big cities, is very promising.”
The CEO also thinks that Indonesia’s e-commerce transactions in second-tier cities could jump to 48% by 2025 from 30% last year.
Bukalapak will use over 60% of the IPO proceeds to invest in the business and the rest will be used to expand its subsidiaries. In 2020, the tech company achieved revenue of $95.8 million and connected to more than 100 million users.