This undated photo shows a woman who uses Bukalapak's platform to complete a transaction at a convenience store in Jakarta. (B1 Photo)
Bukalapak Woos Seller-Partners for Its Gigantic IPO
BY :GRACE N. CHANDRA, LONA OLAVIA
JULY 10, 2021
Jakarta. Indonesian e-commerce giant Bukalapak has set its sight on millions of seller-partners to participate in the company's $1.5 billion initial public offerings, the largest in the country in a decade.
Bukalapak held a public expose inviting sellers, partners, and the public to become a shareholder preceding the company’s initial public offering on Friday.
The company sought to raise Rp 21.9 trillion ($1.5 billion), offering up to 19.3 billion new shares, or 25 percent of the company's enlarged capital, at Rp 750 to Rp 850 apiece. That would be the largest IPO in more than a decade since Adaro Energy raised Rp 12.2 trillion in 2008.
This debut is set to become a milestone in the Indonesian business sphere, as Bukalapak, founded over a decade ago, will be Indonesia’s first tech unicorn to tap into the country’s stock market.
Rachmat Kaimuddin, Bukalapak's chief executive officer, said the company encouraged 8 million independent sellers on its platform to take part in the offering.
“We invite our sellers and partners who have been struggling with Bukalapak to be part of the Bukalapak IPO," Rachmat said.
He said the IPO marked an important milestone for the company's journey to empower urban and rural communities around Indonesia.
The company plans to use two-third of the proceeds from the share, offering the company's working capital while investing the rest in its subsidiaries, including Buka Mitra Indonesia and Buka Usaha Indonesia, which focus on digitizing the street stalls across Indonesia.
“We hope that this IPO can increase our working capital so that we can focus and accelerate all our plans,” Rachmat said.
Bukalapak planned to continue to expand its user audience by focusing on branching out into more rural areas.
The company's data showed 70 percent of online transactions occur in Tier-1 cities — Jakarta, Surabaya, Medan, Semarang — which account for 10 percent of the Indonesian population. Tapping into the remaining 90 percent of the population was said to be a big goal for them going forward, Rachmat said.
Bukalapak revenue grew 26 percent to Rp 1.35 trillion last year from Rp 1.08 trillion a year earlier, showing its business model resilience amid the pandemic.
Rachmat attributed the performance to the company business model that focuses on empowering the small-, medium-sized (SME) enterprises. Naming themselves as an “All-Commerce” platform, Bukalapak plans to bridge offline consumers to online consumption, leading to a fairer economy for all.
"This new opportunity not only helps the community to be able to withstand the economic impacts arising from pandemic but also creates a positive socio-economic impact for the community," he said.
Bukalapak helped 4 million small businesses open shops last year, he said. Many of these SMEs are family-owned stalls. For every 50-100 homes, a person or a family opened a shop in their home and sold basic fast-moving consumer goods (FMCG) such as water, soap, coffee, instant noodles, etc. Rachmat said.
Bukalapak helped this business by linking them with manufacturers or major suppliers and providing them with a digital accounting platform, enabling them to access banks loan should they decide to expand their business. Bukalapak digital platform also allowed this small business to sell digital products, ranging from phone credits to airplane tickets.
In addition, Bukalapak's disciplined approach to business has also resulted in a lower burn rate on its capital. The company's loss narrowed to Rp 1.35 trillion last year from Rp 2.79 trillion a year earlier.
Bukalapak's financial report showed the company spent Rp 1.52 trillion for sales and marketing and Rp 1.49 trillion on general and administrative expenses in 2020, compared to Rp 2.32 trillion and Rp 1.27 trillion, respectively, in 2019.