Ecommerce group Bukalapak’s shares jump 25% in Indonesia’s biggest IPO

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Ecommerce group Bukalapak sealed its place as Indonesia’s biggest stock market listing after raising $1.5bn, with its shares jumping 25 per cent on its Jakarta debut and setting the tone for south-east Asia’s technology boom.

Bukalapak’s initial public offering was closely watched by investors as the first of a wave of tech start-ups from the region that are set to go public. Others include Indonesia’s GoTo, formed by an $18bn merger between ride-hailing and delivery group Gojek with ecommerce player Tokopedia, and its Singapore-headquartered rival Grab.

Shares in Bukalapak surged on the Indonesia Stock Exchange to value the lossmaking group at $7.6bn, making it one of the 15 biggest companies in the country. The rally triggered a mechanism on the bourse that caps a company’s daily stock price gain.

“This is great for Indonesia’s tech ecosystem,” said one rival Indonesian start-up that is also contemplating a public listing this year. Bukalapak was previously expected to raise just $300m but beefed up its IPO on bumper demand.

South-east Asia’s fast-growing tech companies have received huge influxes of foreign venture capital. US tech group Microsoft, Singaporean sovereign fund GIC and Jack Ma’s Ant Group are among the previous investors in Bukalapak.

But the regional tech groups’ sources of funding are evolving. Special purpose acquisition companies, or blank-cheque vehicles, are playing a bigger role while bourses are changing regulations to make it easier for start-ups to list. Indonesia’s exchange is working on an amendment to listing rules that would relax restrictions on lossmaking companies.

Private equity investors have previously held back from the region owing to a lack of exit options via IPOs and acquisitions, said Andrea Campagnoli, a partner at Bain & Co.

“Many investors were waiting for this moment. Now that flywheel is starting to work, it is going to be a tremendous tailwind for south-east Asia’s internet economy,” he said. The fact that Bukalapak listed in Indonesia, rather than the US as with many of its peers, was important for investor confidence, Campagnoli added.

Bukalapak posted revenues of $95.8m in 2020 according to its prospectus and had 104.9m registered users in Indonesia. Last year, it cut its net losses more than 50 per cent to $89.5m.

The company, whose name means “open a stall”, helps millions of mom-and-pop stores across Indonesia sell goods online. Its other services include financial products.

The company is one of Indonesia’s earliest online shopping players but it has fallen behind some rivals in recent years. Bukalapak was Indonesia’s third most-visited ecommerce website in the first quarter of the year, according to iPrice data, behind Tokopedia and regional giant Shopee.

Grab, one of Bukalapak’s partners, announced a record Spac merger in April valuing the company at $40bn and paving the way for a New York listing in the final quarter. GoTo is targeting a dual listing in Indonesia and the US this year.