Traveloka will Expand Fintech to 2 Countries & Study Digital Banks

Unicorn Traveloka plans to expand its financial technology (fintech) services to Thailand and Vietnam. This jumbo startup is also reviewing investment in banks in Indonesia. The plan is for expansion to the two countries before this year’s initial public offering or IPO. Traveloka president Caesar Indra said this was done because businesses in Thailand and Vietnam were starting to recover.

In the Land of the White Elephant, the market is almost to the level before the corona pandemic. In Vietnam, Traveloka’s business is stable because there are only a few positive daily cases of the coronavirus. Therefore, this startup is intensifying transactions in the two countries.

“Our plan is to invest in fintech on a large scale to enable more consumers to travel in the region (Thailand and Vietnam),” Indra said as quoted by Reuters, Thursday (25/2).

Traveloka will form a joint venture in the fintech sector by partnering with one of the largest banks in Thailand. This startup is also in the process of discussing with potential partners in Vietnam. In the early stages, the company will develop pay-later or paylater services in Thailand and Vietnam.

This product was first available in Indonesia, and has facilitated more than 6 million loans. Apart from paylater, Traveloka offers insurance and wealth management services in the archipelago. Indra said that the potential for the fintech business in Indonesia is huge.

This is because only 6% of the 270 million people have credit cards. In Indonesia, Traveloka is also considering buying a bank to expand its services. “All options are on the table,” said Indra.

Focus on Financial Services to Make a Profit

During an interview with Kr-Asia journalist Khamila Mulia previously, Traveloka Co-Founder Albert Zhang said that the company will focus on financial services to make a profit this year. So far, the company has 7 products related to finance, namely insurance, points, paylater, digital wallet through Uangku, top-up balances, connectivity and data, as well as international data plans.

Users of financial products in Indonesia will also increase in 2020. For Paylater, for example, it has increased seven times. Meanwhile, Traveloka Paylater Card users increased five times. Traveloka CEO Ferry Unardi also wants the company to grow quickly. Therefore, the unicorn is 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 week (16/2).

The plan is that in the early stages, Traveloka will have an IPO on Wall Street, USA. However, Ferry did not specify the US stock exchange 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 in the US.

IPO through SPAC is Considered Efficient

The company studied the initial public offering on the Indonesia Stock Exchange (IDX) after the US. They will IPO through a special purpose acquisition company or SPAC. “SPAC is very efficient,” said Ferry.

SPAC is also known as a blank check company, because it does not have any operations. The funds are used to finance a project of acquisition or merge opportunities within a specified period.

The company was approached by the SPAC company. Another source with knowledge of the matter said the unicorn was still reviewing the IPO or SPAC and was eyeing a valuation of US$ 5 billion to US$ 6 billion.

Some of the SPACs associated with Traveloka’s IPO plan are Bridgetown Holdings, Cova Acquisition, and those affiliated with Saratoga, Provident Acquisition. Provident Acquisition is currently reportedly in the negotiation stage to bring Traveloka IPO in the US. Meanwhile, the parent company, Provident Group, is one of Traveloka’s investors.