Vision Fund, Alibaba lead RM4.6b Tokopedia round

The financing round will help Indonesia’s biggest e-market place venture into new areas such as air tickets and insurance

By BLOOMBERG

SINGAPORE • SoftBank Vision Fund and Alibaba Group Holding Ltd led a US$1.1 billion (RM4.61 billion) investment in PT Tokopedia, a financing round that will help Indonesia’s biggest online marketplace venture beyond e-commerce into new areas such as air tickets and insurance.

The company was valued at more than US$7 billion after the funding, according to people familiar with the matter, who asked not to be identified as the information is private. That would put it at the top of CB Insights’ ranking of Indonesian start-ups.

SoftBank Ventures Korea Inc and other existing backers joined the round, Tokopedia said in a statement without detailing its valuation.

The funding, which Bloomberg first reported last month, underscores the Jakarta-based company’s ambit ion to broaden its business by investing in logistics, fulfillment, payments and financial services.

It aims to help millions of merchants, from mom-and pop stores to farmers, improve margins, restock faster and gain access to financial services, CEO William Tanuwijaya said in an interview.

“We ultimately can help these businesses serve their customers better,” he said. “If we can do all of that, we will be one step closer to our mission, to democratise commerce — both online and offline — through technology.”

Tokopedia’s latest round comes after a 2017 financing of the same amount, led by Alibaba, the company said.

The influx of capital will help it better compete in an increasingly vibrant Internet space: South-East Asia’s most richly funded start-ups are starting to resemble Chinese Internet giants such as Alibaba and Tencent Holdings Ltd, which offer customers a plethora of on-demand mobile services to go along with digital wallets.

Grab and Go-Jek, for instance, began as ride-hailing platforms, but evolved into apps offering other services centred around payments and food delivery. Like its backer Alibaba, Tokopedia already offers flight and train tickets, as well as access to attractions and events, encroaching on the domain of online travel companies like PT Traveloka.

Tanuwijaya, the 37-year-old son of a factory worker, co-founded the company in 2009 and has capitalised on the country’s rapid adoption of smartphones and increasing comfort in shopping online. He previously cited a 2014 meeting with SoftBank’s billionaire founder, Masayoshi Son, as a turning point for the company.

Indonesia’s Internet economy is now the largest and fastest growing in South-East Asia with e-commerce poised to be worth US$53 billion by 2025, according to Google LLC and Temasek Holdings Pte Ltd.

“Tokopedia already provides millions of consumers with access to more than 100 million products,” said Lydia Jett, a senior investor at Soft- Bank Investment Advisors, which oversees the Vision Fund. “The company is well-positioned to serve millions more as Internet adoption continues to grow rapidly in the region.”

Tokopedia is No 1 in terms of monthly web visits in the third quarter, according to market researcher iPrice Group. It is followed by Bukalapak, Shopee and Lazada, a unit of Alibaba.