Traveloka is strengthening its local offerings with a potential public listing in its future, either through a traditional IPO or a red hot SPAC. The approach may be paying off as the company works to bolster its operations for a post-pandemic world, but how much more localization can the app offer?
Whether you’re planning a local holiday in Vietnam, looking to purchase Covid-19 PCR tests in Indonesia, or want flowers delivered to someone special in Thailand, Traveloka says it has an app for that.
Southeast Asia’s biggest online travel startup has made use of the pandemic by focusing inward to diversify its local offerings. For the company’s leaders, that meant having to dive deeper into lifestyle and financial services both areas where consumers in the region are hungry for solutions, and ones that they feel could drive interest in a potential U.S.-listed IPO for Traveloka. Company leader say that could happen shortly.
The Indonesian online travel unicorn currently has 40 million downloads, 16 million of them in Indonesia, and is growing in popularity across its core home market, as well as Thailand and Vietnam.
The startup prides itself in being aggressively dedicated to developing local offerings and solutions for its customers, particularly in Indonesia, its leaders told Editor-at-Large Raini Hamdi during Skift’s Online Travel and Distribution Summit on Wednesday.
With 66 percent of its population “unbanked,” Indonesia is one of the world’s most valuable untapped e-money markets. Traveloka is currently tapping into this potential by offering credit facilities to users who may not have bank accounts so that they can purchase its travel and lifestyle products.
“Our ‘buy now, pay later’ service is getting a lot of attention,” said Traveloka Chief Operating Officer Alfan Hendro. “We have actually facilitated six million loan transactions.”
Hendro also confirmed to Skift that the company would be going public “soon.”
Last week, it was special purpose acquisition company (SPAC).
Reuters reported last week that the Jakarta-based company is eying a valuation of $5-6 billion.
Hendro told Skift proceeds would be used for expansion into other markets beyond Indonesia and Southeast Asia.
Traveloka is said to have a private market valuation of about $2.75 billion. It had earlier announced raising more than $750 million to date from investors, which include Expedia Group Inc., Singapore’s sovereign wealth fund GIC, East Ventures, as well as JD.com.
In July 2020, the group also managed to reel in $250 million in fresh funding to help strengthen its operations and its balance sheet, which was hit by the coronavirus pandemic.
“We aim to do the IPO as soon as possible and to do it right,” Hendro told Skift. “We see very strong interest, and we think that actually reflects the strength of Southeast Asia’s tech ecosystem. Going public can help us gain support from the public market and bring us resources to expand.”
As part of that expansion, Hendro said the company is well-positioned to export what it learned from developing local infrastructures on the ground in Southeast Asia, to other developing markets.
Traveloka also plans to remain “true to its DNA.” For its chief managing officer, Christian Suwarna, that means owning its identity as a company with a “global perspective, but local flavor.”
The diverse needs of developing markets across Indonesia, Thailand, and Vietnam allow Traveloka to offer unique customized payment methods, services, and credit facilities for each country. These are just some localization methods that the company is honing in on to position itself as a local travel and lifestyle guru.
“This deep local context is something that we want to commit to continue developing to create the best offerings and solutions for our customers,” said Suwarna, who is also Chief Executive Officer (CEO) of Traveloka Xperience, the lifestyle arm of the online platform.
Since 2019, the company has been expanding its lifestyle side of business into services such as food delivery, wellness, and even doctor appointment bookings. But, travel still remains at the core of its business despite Covid-19’s devastating impact on the sector in 2020.
Despite the setbacks, the pandemic has also brought about a permanent and massive digital revolution in Southeast Asia. Around 40 million people in the region’s largest countries turned to the internet for the first time in 2020, compared with a total of 100 million between 2015 and 2019. This is exactly what Traveloka’s looking to capitalize on.
“There is very high interest in traveling post-Covid 19; by having our financial services option, we hope to enable travelers better. We are looking to offer financial services to our merchant partners as well, and I’m sure many of them will see this option as useful due to the Covid-19 situation,” Hendro added.
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Photo credit: Traveloka headquarters in Jakarta, Indonesia. The online travel unicorn is focusing more on localization in a post-pandemic world. Traveloka