Indonesian tech start-ups abandon US Spac deal plans in favour of going local


The blockbuster domestic listing of Indonesian ecommerce group Bukalapak has prompted other start-ups in the country to abandon plans for overseas share offerings in favour of going local, signalling a payday for their foreign backers.

International investor interest in Indonesia’s tech sector has surged, with group’s including Facebook, Microsoft, Tencent, Alibaba, Google and private equity firms KKR and Warburg Pincus piling into local start-ups.

South-east Asia’s biggest economy, Indonesia has the region’s largest crop of unicorns, or privately held start-ups, valued at more than $1bn.

Until Bukalapak’s $1.5bn listing in August, however, none had successfully listed on a stock market, a crucial step in the start-up lifecycle for global investors. 

Now, other Indonesian tech groups are considering the Indonesia Stock Exchange (IDX) as a credible alternative to international initial public offerings. Conglomerate MNC Group, founded by billionaire Hary Tanoesoedibjo, has dropped a plan to list its video-streaming service in the US through a merger with a blank-cheque vehicle this month.

“When you get an exit like that [Bukalapak], it gets the attention of later-stage funds,” said William Bao Bean, general partner at global venture capital fund SOSV. “Not only that it was a successful one and it has fired the starting gun, [but] we should [also] see a funding surge going into the market from international investors.” 

The IDX has sought to attract more tech names though the introduction of regulations to accommodate the sector, such as dual-class shares that would give founders and existing shareholders more control of their companies.

Bukalapak, an online marketplace backed by Microsoft, Chinese billionaire Jack Ma’s fintech company Ant Group and Singapore’s sovereign fund GIC, upsized its IPO from an initial target of $300m to $1.5bn, which made it the country’s biggest-ever stock market listing.

The debut buoyed the prospects of other tech companies set to go public in Indonesia. GoTo, a “super app” that offers ecommerce, ride-hailing, delivery and payments services, is planning a dual listing in Indonesia and the US targeting a market valuation of more than $40bn.

GoTo’s backers include Tencent, Google, SoftBank, Alibaba, Visa and Warburg Pincus.

Raghav Maliah, global vice-chair of investment banking at Goldman Sachs, said Indonesia had the “largest addressable market” and was at the forefront of demand from global investors.

Barrett Comiskey, chief executive of Migo, a start-up that allows consumers to download movies and television shows to their mobile phones via a machine installed at convenience stores, said an onshore listing made “a lot of sense” in the wake of Bukalapak’s IPO. 

“Our blue-chip investors have always encouraged us to go to the market where the investor base best understands,” he said. Migo’s investors include Singaporean state investment fund Temasek and YouTube co-founder Steve Chen. 

MNC Group this month terminated an agreement to merge its subsidiary Asia Vision Network, the holding company for local streaming platform Vision+, with Nasdaq-listed special purpose acquisition company Malacca Straits Acquisition Company. MNC cited “increasing enthusiasm of investors in the IDX” for digital companies. 

Willson Cuaca, co-founder of heavily Indonesia-focused venture capital firm East Ventures, said a number of his portfolio companies were considering share sales in the country. 

“It’s about scarcity value; there are not many public tech companies listed in Indonesia,” he said.

However, Indonesia still has some way to go to catch the US or other markets in demand for tech start-ups.

The IDX ranks 23rd in the world in terms of the market capitalisation of its listed companies at about $500bn, trailing Singapore and Thailand in the region, according to World Bank data. Trading is also still primarily retail-driven, which makes share prices volatile.

“There is still a lack of institutional investors providing stability, though that could change if we get a string of successful IPOs,” said Hwee Ang, founder of financial advisory group Anagram Advisors.

Political risks are another issue, she added. “There is always a question of government longevity in south-east Asian countries, and how policies could change.”

And while Bukalapak rose sharply on its trading debut, its stock has since drifted back down to near its IPO price.

Last month the parent of Kredivo, the Indonesian “buy now, pay later” app, agreed to go public via a $2.5bn merger with a Nasdaq-listed Spac. 

While Kredivo had not planned on pursuing a US IPO, founder Akshay Garg said: “We think it’s always better, as a strategy, to do a listing in the deepest possible capital market, and that’s [the] US.”


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