Traveloka Collaborates with Subsidiary of Big Bank in Thailand

Unicorn Traveloka announced an agreement with venture capital from Thailand, SCB 10X, to form a joint venture company called Trex Ventures. Both will develop financial products.

SCB 10X is a subsidiary of the third-largest bank in terms of assets in Thailand, Siam Commercial Bank (SCB). Trex Ventures will later focus on providing financial services in the White Elephant Country.

“What is clear is that these financial products and services are tailored to meet the needs and lifestyles of modern travelers and lifestyle consumers in Thailand,” said Chief Business Development and Financial Officer of SCB, Pitiporn Phanapha, quoted from the Nikkei Asian Review, last weekend (26/3).

The SCB Group is indeed aggressively digitizing various financial services in Thailand. The central bank of the Bank of Thailand also noted that SCB only operated 850 branches in February. The number has decreased compared to the end of 2018, namely 1,101 branches.

SCB also launched the food delivery application (food delivery) Robinhood in July 2020. Recently, SCB revealed plans to develop an e-commerce platform. Meanwhile, Traveloka’s steps in attracting banks are aimed at making a profit.

“We believe the consumer market in Thailand offers many opportunities for the company,” said the President of Traveloka Caesar Indra. He considered the Thai market is potential. This is because only 30% of consumers in Thailand have credit cards. “We see that the need for financial services is similar to what we see in Indonesia,” he said.

Traveloka is also Targeting the Vietnamese Market

Previously, Indra said that the company would also target Vietnam. This startup is reportedly in the process of discussing with potential partners in Vietnam.

The expansion to the financial sector in the two countries is carried out by Traveloka in the middle of an initial public offering, aka IPO, this year. Indra said that the company is targeting Thailand and Vietnam, because business in the two countries is starting to recover.

In the Land of the White Elephant, for example, the market is almost to the level before the corona pandemic. In Vietnam, the company’s business is stable because there are few positive daily cases of the coronavirus. Hence why, Traveloka is intensifying transactions in these countries.

“Our plan is to invest in fintech massively to enable more consumers to travel in this region (Thailand and Vietnam),” Indra said as quoted by Reuters, last February (25/2).

Financial products are first available in Indonesia through pay later or paylater services. The service has facilitated more than 6 million loans. Other than paylater, Traveloka also offers insurance and wealth management services in the archipelago.

Indra said that the potential for the fintech business in Indonesia is also very large. This is because only 6% of the 270 million people have credit cards. In Indonesia, this company is also considering buying a bank to expand their services.

IPO Target This Year to Support Company Development

Traveloka CEO Ferry Unardi said the company wanted to grow quickly. They are targeting an IPO this year. “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 last February (16/2).

The plan is that in the early stages, the company will have an IPO on Wall Street. However, he didn’t specify the US stock exchange to be selected, such as New York Stock Exchange (NYSE) or the Nasdaq. The company has also hooked up JPMorgan Chase & Co for the IPO process in the States.

After the US, it studied the initial public offering on the Indonesia Stock Exchange (IDX). In the US stock exchange, Traveloka will IPO through a special purpose acquisition company (SPAC).

“It is very efficient for IPO,” said Ferry. It’s known as a blank check company, because it does not have any operations. This type of company is an investment vehicle specially made to raise funds for the rich.