Indonesia’s Tokopedia passed on acquiring rival Bukalapak

Bukalapak is in dire straits, Tech in Asia has learned. It may be looking for a buyer, or
facing a restructuring.

A source familiar with the talks said that Indonesia’s ecommerce marketplace Tokopedia considered acquiring smaller rival Bukalapak, but decided to pass because it didn’t see enough value-add in the deal.

Tokopedia is backed by SoftBank and Sequoia Capital. Its current valuation is unknown but likely near, or above, US$1 billion. Bukalapak’s valuation sits at about US$200 million.

It’s unclear whether it ever came to concrete talks between the two companies to discuss deal value.

Bukalapak CEO Achmad Zaky.

Tokopedia’s CEO William Tanuwijaya said “no comment,” when asked if he decided against acquiring Bukalapak.

Bukalapak is backed by KMK, a subsidiary of Indonesian media conglomerate Emtek. KMK CEO Adi Sariaatmadja said there was no discussion with Tokopedia about a possible acquisition.

“It’s not true,” Adi told Tech in Asia. He also insists Bukalapak is doing fine. It’s growing in team size and “revenue is climbing.” Toward the end of last year, a new COO was brought in to help Bukalapak gain efficiency.

But funds are running low. A separate source familiar with the company told Tech in Asia that Bukalapak has tried, but failed, to raise additional venture capital from sources outside of its main investor Emtek.

The media company last injected roughly US$20 million into Bukalapak in November 2015, according to its financial statements. According to our sources, it’s reluctant to pour in more at this point.

We’ve contacted Bukalapak CEO Achmad Zaky to get his view but are still waiting for a response.

Not the only one struggling

This year is going to be tough – not just for Bukalapak – but for most mid-sized ecommerce players in Indonesia.

This view is backed by multiple sources in the industry, and it’s easy to see why pressure on these startups is mounting.

With mighty Alibaba now backing Lazada, Sequoia and Softbank behind Tokopedia, and Amazon’s plans for Southeast Asia becoming more concrete, whoever wants to stay relevant must be prepared to continue spending millions of dollars on winning market share.

Companies like Matahari Mall, Blibli, or BerryBenka won’t have access to capital at the scale of what Alibaba or Amazon can afford to spend.

It’s possible we’ll see mergers of some of the mid-size ecommerce players still in the field as investors get antsy and look for exits.

Or, companies could slim down significantly, and pivot their way into new business models where they no longer fight on the same front as the general ecommerce players.

This post Indonesia’s Tokopedia passed on acquiring rival Bukalapak appeared first on Tech in Asia.

from Tech in Asia https://www.techinasia.com/indonesias-tokopedia-passed-acquiring-rival-bukalapak
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