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Cashlez CEO and founder Teddy Tee and a Cashlez mascot introduce the CashlezOne mPOS device. ©Cashlez

Indonesian fintech Cashlez will offer 20% of its shares to the public via the IDX development board; plans M&A, more aggressive expansion

Aiming for a March debut on the Indonesia Stock Exchange (IDX),  mobile point-of-sale (mPOS) and digital payment gateway startup Cashlez is also expanding its market to include highways and parking lots.

“We aim to launch our IPO and list by the end of the first quarter, or March, this year,” said Cashlez CEO and founder Teddy Tee, as quoted by financial news site Investor Daily. The company first announced its IPO plans in October 2019

Cashlez will be offering 20% of its shares to raise a target amount of IDR 100bn ($7.3m) to accelerate expansion and improve corporate governance. Part of the funds will be used to acquire a controlling stake in another cashless payments company, the largest in the transport sector. 

“The company we want to acquire is developing cashless payment systems for highway toll gates and a payment app for parking lots. They also make vending machines,” said Tee.

The company is raising funds in the stock market because of “friendlier” tax requirements, and a desire to follow in the footsteps of other successful fintech companies overseas. Going public also means that Cashlez will improve its transparency and corporate governance practices. Public listing plans were first announced in October 2019. Cashlez is awaiting approval from the Financial Services Authority (OJK) to list on the exchange’s development board. Book-building was set to begin on February 24.

Two years to turn profitable 

Tech companies in Indonesia are warming up to the idea of going public. In January 2020, Pigijo became the first startup to list on the IDX's new acceleration board for tech companies. The e-marketplace for tours and travel guide services managed to raise IDR 12bn. The acceleration board was launched in 2019 to encourage more SMEs and tech startups to go public by giving them a six-year period to achieve their first profit. The companies can also offer their shares at a lower minimum price of IDR 50 apiece, compared with the IDR 100 minimum required by the main IDX and development boards.

Among the unicorns, Traveloka CEO Ferry Unardi and Gojek co-CEO Andre Soelistyo have expressed interest in dual listings with the IDX as an option. However, Soelistyo also noted that Gojek doesn't have a “pressing need” to go for an IPO. He felt that it was more important to make sure that Gojek has implemented good corporate governance and can grow sustainably before going forward with any listing plans. Bukalapak's then-CEO and co-founder Achmad Zaky said he wanted Bukalapak to become profitable first to demonstrate that the company can be listed anywhere, “be it in Singapore, Nasdaq (the US), Australia and of course, Indonesia.” Its rival, Tokopedia, is reportedly in talks for a final pre-IPO private funding round.

Cashlez had already raised $2m in seed funding from Mandiri Capital Indonesia (MCI) and Gan Kapital in 2017. An undisclosed amount of Series A funding was later secured from Sumitomo Corporation and MCI in April 2019. 

Founded in 2015, Cashlez produces a cloud-based mPOS system and payment gateway to enable SMEs to accept cashless payments and manage their cashflow more efficiently. The mPOS devices can facilitate cashless payments by credit/debit, contactless cards and even QR code-based payments provided by e-wallets GoPay, OVO and LinkAja. Its mPOS system competes with those developed by MOKA, Pawoon, and other companies. Meanwhile, competitors in the e-payments sector include DOKU, Midtrans (since acquired by Gojek), and Xendit.

Targets IDR 10tn revenue 

Cashlez is now being used by 6,300 merchants, double that of 2018. The total transaction value has also doubled, with gross transaction value (GTV) up by 180%. “Based on our audited financial report, we have processed 3m transactions worth IDR 3.8tn up to the end of 2019. We hope the value will increase to IDR 10tn this year,” Tee told Investor Daily.  The CEO is confident the company will achieve its "first profit” within two years after listing as is required for companies listed on the IDX development board.

The company wants to become more aggressive in its expansion strategy. Following its acquisition of the transport sector-based player, Cashlez will merge both services and focus on offering more innovative fintech services to their enlarged user base. Cashlez will also seek more partnerships with bank and non-bank payment providers, so Cashlez users can accept more payment methods.

KinerjaPay (KPAY) was the first Indonesian fintech company to list its shares, debuting in the US OTC market in 2013. In September 2017, e-commerce company Kioson became Indonesia’s first homegrown tech startup to list locally on the IDX. It raised IDR 45bn by issuing 150m shares, accounting for over 23% of its total equity. In October 2017, digital goods distributor MCASH raised a whopping IDR 300bn, its IPO oversubscribed by more than 10 times. Its subsidiary NFC Indonesia, which operates a digital marketplace for phone credit top-up vouchers, followed suit in July 2018 and raised over IDR 308bn.

In October 2018, PT Distribusi Voucher Nusantara (DIVA) raised IDR 632bn via IDX. Less than a year later, the developer of plug-and-play platforms acquired a 30% stake in cloud-based POS startup Pawoon in August 2019. Both have now linked up to produce an integrated multi-payment device called DIVA Smart Outlet that can process cash and non-cash payments.

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Edited by Suzanne Soh

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