Indonesian unicorn Traveloka aims for US listing via SPAC

© Traveloka

The online travel aggregator reported revenue drops and layoffs in 2020 but became profitable late last year, led by recoveries in Vietnam and Thailand 

Traveloka has returned to profitability and is planning to list in the US this year using a special purpose acquisition company (SPAC), its top executives told news agencies recently.

President Caesar Indra said the company “returned to profitability” in late 2020 on the back of recoveries in Vietnam, where business has “surpassed” pre-Covid-19 levels, and Thailand, where it is almost back to normal. In Indonesia its business is at half pre-Covid levels.  

Like many other tourism-related businesses, Traveloka suffered a major blow in 2020 as curbs on intercity movement and border closures led to booking cancellations and sharp falls in revenue. Indonesia saw a 68% decline in online travel sales in 2020.

Traveloka laid off 10% of its staff in April 2020.  Affiliate company Airy Rooms, which ran a network of budget hotels and accommodation in Indonesia, shut down in May 2020, but in July 2020, Traveloka announced it had raised $250m from undisclosed investors to cushion the impacts of the pandemic and support operations as domestic travel restrictions started to ease.

In October 2020, Henry Hendrawan, who was president of Traveloka at that time, said the company had to “cut a lot of fat” to improve its situation. “We are in a position now to attain a stronger financial position compared to the pre-pandemic era,” he said.

CEO Ferry Unardi said using a SPAC is a “very efficient” option for the company to list. “If we can do it faster we can then focus on execution and growing the company.” He added that a merger or acquisition is also an option after the IPO and the company may consider a listing in Indonesia at a later date.

Buy now, pay later

Meanwhile, Indra said the company is planning “buy now, pay later” (BNPL) services in Thailand and Vietnam. “The plan is to invest in fintech in a big way to allow more consumers to travel in the region.” The company has formed a joint venture with “one of the largest banks in Thailand” to kickstart its fintech plans and is also talking to potential partners in Vietnam, he added.

BNPL services provide flexible payment options without the need for a credit card, allowing unbanked and underbanked customers to buy big-ticket items, such as flight tickets or home appliances, by splitting the cost into easier-to-pay instalments.

Traveloka is not a newcomer to BNPL. In September 2019, it launched its “PayLater” credit card in Indonesia through a partnership with state-owned bank BRI after the company found that many of its customers would wait for a payday before booking tickets and accommodation. To-date, PayLater has facilitated about 6m credit transactions.

Other fintech companies in Indonesia like Home Credit, Kredivo and Akulaku, have also given Indonesians access to BNPL services. E-commerce platforms like Tokopedia, Bukalapak and Blibli as well as some offline retailers also offer BNPL payments, usually through partnerships with fintech companies like OVO and Indodana. Ride-hailing super app company Gojek has introduced a similar feature for its GoPay e-wallet and payments service.

Edited by S. Mani

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