Overview of Tokopedia business
The Pioneer of halal focused e-commerce investment in Indonesia is undoubtedly Tokopedia. Tokopedia serves millions of customers (specifically a large halal market) and investors for more than a decade. A unicorn company, Tokopedia, is planning to go public in the year 2021 most probably with the merger of an on-demand service and payment firm called Gojek.
Tokopedia offers a large variety of services such as online retail, digital payment options, a portal for ticket sale for both planes and trains, hotel room booking, tickets for movie or events along with streaming services. Consumers can utilize these services through Tokopedia application and website. After their establishment soon Tokopedia recognizes that fintech is a key to their success. To make this happen and to convince people to spend their money on this platform they have to make their payment and financing features smooth. For this Tokopedia joined with e-wallet Ovo and with 41.08% became a strategic shareholder.
Tokopedias halal market
To flourish their fintech in Indonesia they collaborated with many other companies. For example, Tokopedia collaborated with Orori which enable users to invest in gold commodities through a feature called Tokopedia Emas. According to Jakpat Survey, gold is the favorite instrument of investment by the Indonesian Millenials. Due to Tokopedia investing in gold has become very easy. Moreover, no business or finance knowledge is required to invest in gold. One must have to keep the price difference in mind. Gold is the halal investing option that is attracting many young Millenials Muslims in Indonesia to go for halal investing in Indonesia.
This is a halal investment method that is very much popular in Indonesia’s Muslim population. Another Halal investment method added by Tokopedia is mutual funds. Investing in mutual funds is quite easy than investing in a stock. Mutual funds investment normally requires an account through Tokopedia and you can start investing in 5 minutes into mutual funds. Mutual funds investment has a low barrier to entry. Tokopedia mutual funds investment starts from 10 thousand IDR that is very low as compared to stock financing that requires a mandatory deposit of 500k and more. In addition to that Indonesian government encourages investment in mutual funds by charging 0% tax on their investment.
Tokopedia in Indonesia serves the worlds largest halal market place.
Gojek and Tokopedia IPO
Indonesian biggest digital companies Gojek and Tokopedia are reportedly merging and are in midst of making a deal which may also include going public in both markets of the U.S.A and Jakarta. According to sources that companies are about to finalize a merger agreement that could result in a joint company. This company would offer a large range of services that may include digital payments, rides and even grocery delivery.
Both of these companies will sign a conditional sales and purchase agreement that would merge them into a 40 billion dollars powerhouse. Through this deal, Tokopedia will provide e-commerce business insight and Gojek will provide ride-hailing along with various payment operations through a “SUPER-APP”. This app will provide numerous services on a single platform.
In this new company, construct after the merger of Tokopedia and Gojek, Tokopedia will hold forty percent of shareholders while Gojek will hold sixty percent of shares. The two companies are now debating which method they should use to list on the U.S market whether to use conventional Initial Public Offering (IPO) or Special Purpose Acquisition Company (SPAC).
SPAC in the SEA of Grab
At the present moment, the worth of Tokopedia is about 7 billion USD. A potential merger of both companies will create an entity worth 18 billion USD. This union might be a way for the two Indonesian tech pioneers to feed off of each other’s rosy IPOs in a quest to hit a combined valuation of USD 35–40 million as publicly traded companies.
Both companies will be benefited from a possible merger. As a union with Gojek a ride-hailing company with Tokopedia will strengthen its logistics capabilities. On the other hand, offerings of Tokopedia’s segment of fresh halal food will be fit for Gojek’s grocery services such as GoMart or GoFood. Gojek’s B2B ecosystem—which spans point-of-sale (POS) terminals, e-wallet GoPay, ad service GoScreen, and merchant networks—could appeal to merchants that use Tokopedia to sell their goods.
Initial Public Offering (IPO) by Tokopedia or a Gojek IPO would be worth Billions of dollars in next year and it would be the biggest overseas listing by a start-up of Southeast Asia, unless Grab (See Grab in Thailand) gets there first! They will use a dual listing plan. This plan will operate a platform for stores that are online, U.S investors that has enthusiasm for tech-related stocks while burnishing Tokopedia’s credentials as a home-grown Indonesian champion. If this would be a success then after PT Telekomunikasi Indonesia this would be the second firm to have U.S Indonesian listing. Funds from this listing would be used by Tokopedia not only just to expand its business but to create the liquidity of shares as well.