Indonesian e-commerce company appeals to investors

Tokopedia, Indonesia’s largest e-commerce marketplace, is said to be involved in a major fundraising effort targeting up to $1.5bn.

Investors for the fundraising are said to include Singaporean investment company Temasek, Chinese e-commerce giant Alibaba and Japan’s SoftBank. According to the UK’s Financial Times the next round of fundraising could come before the middle of the year and could value Tokopedia at between $8bn and $9bn.

The additional capital would give Tokopedia a boost in its efforts to dominate the e-commerce market in Indonesia. Tokopedia is already the market leader in Indonesia ahead of rivals Shopee, Lazada and Bukalapak. Alibaba has a controlling stake in Lazada.

Tokopedia’s success to date is partly down to first mover advantage and local roots. Also its business model – connecting buyers with sellers – is said to be less capital-intensive than that of other e-commerce companies because it does not require extensive logistics.

However, a shake-up may be on the way when and if the world’s biggest e-commerce name – Amazon – joins the fray, which some investors are expecting to happen before the mid-year point.

Nevertheless, the FT notes that Indonesia is proving to be a popular target for Chinese investors in particular. Not only is it southeast Asia’s biggest economy and offers them the chance to diversify their holdings away from China, but many are said to be put off by high valuations for start-ups in markets such as India.