Indonesian Unicorn Startups Hasn’t Gone Public, Why?

Since last year, many startups, especially those that have had large evaluations such as Bukalapak, Tokopedia, and Gojek, are rumored to be listed on the Indonesia Stock Exchange (IDX). However, until the third quarter of this year, there were no startups that took place on the domestic stock exchange.

Both unicorn startups (valuation of 1 billion US dollars) and decacorn startups (valuation of 10 billion US dollars) in Indonesia seem reluctant about the issue. The Chief Executive of Capital Market Oversight of the Financial Services Authority (OJK), Hoesen, explains the reasons.

One of the factors that make startups tend to be reluctant to register their shares, he said, is because of the high level of competition among business actors. “This is my hunch, if the startup is going public, it will be transparent about what their business is like,” Hoesen said.

When a company decides to trade its shares on the stock exchange market, it means it must be completely transparent, both from the business plan, management, to the company’s financial condition. Meanwhile, in terms of startups, the competition is how each of the business actors can spawn the latest innovations.

“It’s like a peer to peer, the secret could be discovered. Thus, hundreds to thousands can make the same application,” Hoesen said. “Gojek and Grab seem to be a similar application. So sometimes to take an IPO, the books would be visible, the margins and so on,” he added.

Hoesen Did Not Hope a Lot for Startups to IPO

Hoesen did not pretend to hope for startups to take the floor on the stock market. As for overseas, several technology-based startups decided to take the floor on the stock market this year. For example, Uber and Lyft have become a public company today.

These ride-hailing companies whose share prices continue to depreciate have not yet managed to record profits on the market. As for the past year, it was widely rumored that several domestic startups would also list their shares on the exchange. These companies are Bukalapak, Tokopedia, Gojek, and Traveloka.

Gojek is one of the startups which often reported to take an IPO recently. This ride-hailing startup is expected to go public in two countries. The substitute of Nadiem Makarim, Gojek’s Co-CEO, Andre Soelistyo, said that the company had begun reviewing opportunities for initial public offering (IPO).

However, he was reluctant to comment on which other stock exchanges would be chosen. “One of the goals of our IPO with the dual listing scheme is to become a global company,” Andre said. But, he stressed that the IPO will not be done shortly.

Indonesia Is One of the Countries with the Most Unicorns

Meanwhile, Indonesia is on the list of 10 countries with the most unicorns in the world according to The Hurun Research Institute. Four technology startups in the country have been transformed into unicorns with a valuation of more than USD 1 billion.

Gojek has even entered the decacorn category with a valuation of USD 10 billion. The other three unicorns are Tokopedia, Bukalapak, and Traveloka. Even today, unicorns in Indonesia have increased by another one with the presence of OVO, which has a valuation of around USD 2.9 billion.

Nowadays, China is the country with the most unicorns. There are 206 unicorns in this country. This figure beat the United States in second with 203 unicorns. While in third place, there is India with 21 unicorns. For now, Indonesia is expected to generate more unicorns soon.

Based on the research results, as of 30 June 2019, there were 494 unicorns worldwide spread in 118 cities and located in 24 countries, including Indonesia. China and the US dominate 80 percent of unicorns that exist on this earth.