SoftBank bets big on Indonesia e-commerce
Softbank's first investment in Alibaba Group came 14 years ago. The initial $20 million was followed by around $80 million more, and by the time of Chinese e-commerce giant's IPO earlier this year, the Japanese tech firm held a 32.4% stake. This holding is now worth around $78 billion.
When SoftBank last week led a $100 million round of investment for Tokopedia, Indonesia's largest e-commerce marketplace, it prompted talk of the company again finding success by betting big and early. Sequoia Capital and existing backer SB Pan Asia Fund, which is managed by SoftBank Ventures Korea, also participated in the round.
"SoftBank's close partnership with Alibaba and its experience in building the world's mostly highly valued marketplace will be invaluable for Tokopedia," says William Tanuwijaya, co-founder of Tokopedia.
Tanuwijaya wanted to build an online marketplace as far back as 2007 but no one was convinced. At the time, Indonesia had no successful internet story as proof of concept and prospective investors feared global competition. Born into a small-town family in north Sumatra, a graduate from a local university, and a man with no entrepreneurial track record, Tanuwijaya was dismissed out of hand.
Finally, in 2009, his former employer Indonusa Dwitama provided seed funding. The company gained traction and there has been a new round of investment each year since then. East Ventures and CyberAgent Ventures were the earliest backers, soon followed by Japanese internet player Beenos in 2012 and then SB Pan Asia Fund last year.
Indonesia is the fourth-largest country in the world with more than 250 million people. Its internet penetration rate of 29% is expected to reach 43.7% by 2017. The size of the e-commerce market will expand from $1.79 billion to $5.48 billion over the same period.
Tokopedia is leveraging this rapid evolution by running a C2C platform through which individuals and businesses can open their own online stores for free. With about 2.6 million transactions every month, the company still has no fixed date for charging merchants that sell goods on its platform. Rather, the near-term focus is growing the user base and consolidating Tokopedia's market-leading position.
"All of the investors believe and support the vision and they never push us to monetize the platform, just to focus on growth. With the new investment of $100 million, should we worry much about generating revenue as soon as possible?" Tanuwijaya says.
His ambition is to take Tokopedia public, which requires strength growth to be sustained. The company's primary obstacle at present is a talent shortage, especially on the technology and innovation side.
"That's also the reason I choose our investors carefully - to make sure we can bring in the know-how and transfer it to our local hires," he adds.
More on Consumer
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.