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Bukalapak announced on Friday that the funds received in the IPO will be used to scale its business to compete with its biggest rival Tokopedia.
The tech unicorn has experienced a surge in demand over the past few months. Consequently, it has reviewed its funding three times, whereby it first intended to raise $300 million. The increased demand advised the company to raise the target to $800 million. And now the firm has revised its target by 25% to meet the huge demand.
The company is heavily backed by notable global investors including Standard Chartered, Alibaba-backed Ant Group, Microsoft, among others. As a result, Bukalapak seeks to capitalize on the huge Indonesian market with over 270 million residents.
“Our business is focused on micro, small and medium-sized enterprises. They are the prime movers in the Indonesian economy,” said Bukalapak CEO Rachmat Kaimuddin.”The opportunity to digitalize them and cater to underserved markets, especially outside the big cities, is very promising.”
The company was founded back in 2010 as an online marketplace to enable small and medium enterprises to scale up their businesses. Over the years, the platform has grown as one of the country’s leading digital platforms.
Thanks to the coronavirus outbreak earlier last year, Bukalapak has seen its operations rise as more customers opt for online shopping. The growth is expected to increase significantly fueled by the initial public offering. Bukalapak announced on Friday that the funds will be used to scale its business to compete with its biggest rival Tokopedia.
Bukalapak IPO and Its Market Outlook
The Bukalapak IPO has attracted a lot of hype from both retail and institutional investors. According to news outlet Reuters, the firm aims to sell approximately 25% of its enlarged capital. Notably, the platform anticipates debuting trading its shares at 750 rupiahs on the low and 850 rupia tops.
Should the firm debut on the higher end target, then the valuation could scale as high as $6 billion. Notably, Bank of America and UBS are reportedly the sole bookrunners. Trading for the Bukalapak shares is expected to kickstart on August 6, 2021.
The firm has been involved in prior funding, whereby private investors have chipped in the capital. In January 2019, Bukalapak announced undisclosed funding round by Mirae Asset-Naver Asia Growth Fund. Back in 2015, the firm completed funding led by Emtek, whereby it managed to raise a total of Rp 439 billion.
The management earlier noted that the company is focused on venturing into the Indonesian market to fully capitalize on the growing demand in the country.