Traveloka Aims for Profit and Plans IPO in the US This Year

Unicorn Indonesia, Traveloka plans to offer its initial shares, aka IPO, on the stock exchange of the United States (US) this year. This travel service provider startup or an online travel agent (OTA) is also optimistic that it will profit in 2021.

Traveloka CEO Ferry Unardi wants the company to grow quickly. Therefore, the unicorn is reviewing this year’s IPO. “If we can do it faster, we can then focus on executing and developing the company,” Ferry said in an interview with Bloomberg journalists, quoted on Tuesday (16/2).

In the early stages, Traveloka will IPO on Wall Street, USA. However, Ferry did not specify the US stock market to be selected, namely the New York Stock Exchange (NYSE) or the Nasdaq. Traveloka has also hooked up JPMorgan Chase & Co for the IPO process.

After the US, the unicorn studied the initial public offering on the Indonesia Stock Exchange (IDX). On the US stock exchange, Traveloka will IPO through a special purpose acquisition company (SPAC). “SPAC is very efficient,” said Ferry.

Has Previously Reviewed a Potential Merger with SPAC for IPO

Previously, Traveloka President Henry Hendrawan also said that the company was reviewing a potential merger with SPAC as an option for an IPO. “SPAC is one of the options being evaluated because we have been approached by several people,” he said in an official statement quoted by Reuters, late last year (21/12/2020).

A Reuters source, who is a banker, revealed that Traveloka was approached by the SPAC company. Another source with knowledge of the matter said the unicorn was still studying the IPO or SPAC and was eyeing a valuation of US$ 5 billion to US$ 6 billion.

SPAC is also known as a blank check company because it does not have any operations. It’s an investment vehicle designed specifically to raise funds for the rich. They finance a merger and acquisition opportunities within a specified period. But the target companies that are merged or acquired aren’t usually identified.

On the one hand, Traveloka has been studying IPOs for a long time. The company also targets to reach a break-even point (BEP) in early 2021, if the travel industry recovers at least 50% compared to before Covid-19.

“The company will be profitable next year,” said East Ventures Managing Partner Willson Cuaca quoted from Reuters, in early December 2020. To Kr-Asia journalist Khamila Mulia, Traveloka Co-Founder Albert Zhang said that the company will focus on financial services to gain profit from this year.

“We have seen great opportunities in this sector to serve the unbanked segment,” he said, as quoted by Kr-Asia, two months ago (12/1/2020).

Planning to Develop Fintech Services

The company plans to develop fintech services vertically and geographically. In addition, partnering with banks in the country and leveraging technology to attract more new users in 2021.

So far, Traveloka has seven products related to finance, namely insurance, points, paylater, digital wallet through Uangku, top-up balances, connectivity and data, and international data plans. Users of financial products will also increase in 2020. For Traveloka Paylater, for example, it has increased seven times. Meanwhile, Traveloka Paylater Card users increased five times.

Even so, Albert said profitability would depend on the market’s recovery. In Vietnam, Traveloka’s business is stable because there are few positive daily cases of coronavirus in the country. Meanwhile in Thailand, the business started to recover 75%.

The OTA startup has recorded the growth of several services in the last year despite the Covid-19 pandemic. The number of daily users has also increased by 100% during 2020. Head of Corporate Communications Traveloka Reza Amirul Juniarshah did not specify which services had increased transactions.

However, he said that the increase in usage was reflected in an increasing number of users. “The number of our users will double in 2020,” said Reza during a virtual press conference, Tuesday (26/1). “We also got funding. This reflects investors who continue to believe.”