Indonesia’s Tech Pioneer Raises $1.5 Billion By way of IPO To Battle ‘E-Commerce Warfare’


Bukalapak is set to become Indonesia’s first tech unicorn to list on the stock exchange, but profitability is not yet in sight.

Rachmat Kaimuddin’s promotion to CEO of e-commerce company Bukalapak earlier last year came as a surprise to many – including himself. The former financier was selected for the job because the company’s investors saw him as the right man to help the river flow Stop red ink and get the 11 year old company on the path to profitability.

But only two months Everything changed during his tenure. The pandemic spread across Indonesia, and the company’s 2,000+ employees reached out to their new CEO for answers.

“For most of my colleagues, the Covid-19 pandemic is probably the first real crisis they have had to deal with in their adult life,” says Kaimuddin, who at 42 years of age feels like a “gray hair” among Bukalapak’s teenage technicians. But with more “life experience,” as he puts it, he can speak with greater authority and give his colleagues some hope.

The majority of Bukalapak employees were not born during the 1997 Asian financial crisis and are too young to remember much of the 2008 global financial crisis, he says. Kaimuddin, on the other hand, vividly remembers the collapse of Lehman Brothers and other events of the financial crisis that occurred shortly after his MBA from Stanford University and working for a private equity firm. It was a bad time to start a new job in finance.

Today, however, he points to this experience and says to his colleagues: “We have seen these cycles before … No matter how bad it is, as long as we survive that will also pass,” says Kaimuddin, referring to both survival and his labor .

Kaimuddin has navigated Bukalapak through the pandemic while laying the foundation for the country’s largest IPO of all time.

Zhu Qincay for Forbes Asia

Indonesia is particularly hard hit by the pandemic. The Ministry of Health has registered nearly 3 million confirmed cases so far, and the country recently reported more daily infections than India and Brazil.

Despite all this, Kaimuddin Bukalapak seems to be on the right track. The online marketplace could continue to operate as transactions skyrocketed during the lockdown, when all Bukalapak employees except for a “skeleton crew” had to work from home. And now the company is set to be listed on the country’s stock exchange as the first Indonesian tech unicorn.

Bukalapak raised $ 1.5 billion in Indonesia’s largest IPO, according to a source familiar with the matter. Bukalapak valued its stocks at the upper end of its indicative range, giving the company a valuation of approximately $ 6 billion. Trading is scheduled to begin on August 6th.

“We are very positively surprised by the dynamism and interest of national and international investors,” says Alvin Sariaatmadja, President Director of Emtek, Bukalapak’s largest shareholder, and hopes that the company will become a “stage”. for future stock sales of other local technology companies.

Forbes Asia

Bukalapak’s list of investors includes the Singapore sovereign wealth fund GIC, the Chinese Ant Group, the US technology giant Microsoft, the Standard Chartered Bank and the South Korean web portal Naver Corporation.

Bukalapak’s sales rose 25.5% to 1.35 trillion rupees ($ 93 million) last year, but the company’s losses show little sign of easing anytime soon. The e-commerce company recorded a net loss of $ 93 million1 in 2020, attributed to significant sales and advertising costs to attract users to its marketplace. And while the loss is down 51.7% from 2019, the prospectus may not see profitability in the near future as the company continues to expand its offerings and marketing efforts.

Forbes Asia

Some analysts say that valuing the company appears too expensive. “Bukalapak’s market share in the Indonesian e-commerce space does not warrant its IPO rating,” said Nathan Naidu and Matthew Kanterman, analysts at Bloomberg Intelligence, in a recent report. According to data from market researcher iPrice, the company was the third largest player in the first quarter of 2021 after local rivals Tokopedia and Sea Ltd.’s Shopee. Still, Bukalapak’s enterprise value-to-forward GMV (gross goods value) has a ratio 1.5 times higher than Tokopedia’s 0.5 times, according to analysts in their report. “Investor appetite for Southeast Asian technology in the face of the lack of publicly traded alternatives could prop up Bukalapak’s price,” they added.

The IPO will bolster Bukalapak’s war chest as it battles for a larger stake in Indonesia’s fast-growing internet economy. Recently merged tech giant GoTo, Shopee and Alibabas Lazada are competing in an e-commerce market that grew 54% in 2020 and has a GMV of $ 32 billion, according to a joint report by Google, Temasek and consulting firm Bain has reached. The same report also predicts Indonesia’s GMV could soar to $ 83 billion in 2025.

“The e-commerce war is very intense,” says Sariaatmadja. In the larger cities of Indonesia, the “competition for the eyeballs” is mainly driven by capital-burning discounts and promotions. But in the smaller towns it is driven by efficient execution on the ground floor.

“No matter how bad it is, as long as we survive this too will pass.”

Rachmat Kaimuddin, CEO of Bukalapak

Bukalapak says it now has 104.9 million registered users, 70% of whom are from outside the vast archipelago’s largest cities.

Translated in Bahasa as “opening a stall”, Bukalapak began as an Amazon-like one Online bazaar in 2010 after the company’s co-founder, Achmad Zaky, discovered during a visit to his hometown that he could help the mom and pop stores, the Warungs, increase their sales by selling their goods online. The then 23-year-old student teamed up with classmates Nugroho Herucahyono and Fajrin Rasyid to build Bukalapak’s website with about $ 5 in capital.

The platform later expanded its purchasing categories from physical goods to digital products such as mobile data, power brands, gaming vouchers, and financial services such as mutual funds and gold investments.

Kaimuddin and his team visit a small shop to collect feedback and learn more about market conditions.


In 2017, Bukalapak started its online-to-offline (O2O) business. The platform called Mitra Bukalapak enables warungs to offer virtual products to customers without an internet connection. It also helps store owners replenish their stocks by connecting them to consumer goods retailers.

“We’re not saying that we’re just playing O2O or just doing e-commerce,” says Kaimuddin. “We want to become an all-commerce company.”

Kaimuddin and his team personally visited the warungs across the country to understand their needs. When the pandemic broke out, they moved meetings online and quickly produced videos in several local dialects to teach shopkeepers how to do business safely.

In addition to being a co-founder, Zaky was the managing director for Bukalapak’s first decade of existence. Regarded by many as one of Indonesia’s most successful entrepreneurs, he took Bukalapak from its humble beginnings to one of the largest e-commerce companies in the country.

But years of hunting for rapid growth had resulted in years of losses. The company reportedly laid off around 10% of its workforce in 2019 to improve efficiency.

Earlier that year, Zaky sparked an online backlash against Bukalapak when he was critical of President Joko Widodo’s efforts to develop the country’s tech sector. The controversy was only resolved after Widodo urged the public not to uninstall the app.

Achmad Zaky (left) handed over management to Kaimuddin in January 2020 and continues to work as a consultant for Bukalapak.


Zaky helped choose Kaimuddin as his successor in 2020. In the months following Zaky’s resignation as CEO, co-founders Herucahyono and Rasyid also left their respective roles. After the IPO, Zaky’s 4.3% stake in Bukalapak will be worth around $ 260 million. He continues to work as an advisor to Bukalapak and co-founded the investment firm Init 6.

“They are pretty big footsteps,” admits Kaimuddin. After all, Bukalapak was one of the pioneers in the Indonesian technology sector.

Kaimuddin was most recently the director of finance and planning at Bank Bukopin. He began his career as a senior associate with the Boston Consulting Group and has held various positions with a handful of investment firms. Kaimuddin received his bachelor’s degree in engineering from the Massachusetts Institute of Technology, and now he says that fintech products that help build Indonesia’s financial inclusion are “close to his heart”.

Bukalapak partnered with Bank Mandiri, the country’s largest financial institution, last year Program for converting mom and pop kiosks into branchless bank agents. The collaboration enables customers who visit the kiosks to transfer money.

Rachmat Kaimuddin spoke to a shopkeeper while visiting the Mitra Bukalapak platform.


For the time being, Bukalapak’s strategy is to continue its transformation into an all-commerce platform through partnerships with companies that can offer complementary services such as financial transactions or logistics.

“We want to stay light and agile, move very, very fast, but use our ecosystem to provide all of these services,” says Kaimuddin.

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