South-east Asia’s biggest online travel start-up, Traveloka, is poised to “invest in fintech in a big way” as it also looks at listing this year.
The firm is planning to launch financial services in Thailand and Vietnam after seeing a strong rebound in its business after the Covid-19 pandemic destroyed demand last year.
Traveloka, which says it has 40 million active monthly users, is developing “buy now, pay later” services for Thailand and Vietnam markets. And it has also been busy preparing for listing, with talks ongoing with special-purpose acquisition companies, or SPACs, for a US issue.
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The company’s president, Caesar Indra, said: “US markets have become more appealing because there’s more and more appreciation of South-east Asia as a flourishing region, and by listing in the US, we can also provide an opportunity for US investors to become part of South-east Asia’s growth story.”
Many SPACs, exchange-listed shell companies that raise money through IPOs and merge with firms by enticing them with shorter listing timelines, have approached South-east Asian start-ups.
Bridgetown Holdings, backed by Asian tycoon Richard Li, Provident Acquisition and Cova Acquisition are contenders for Traveloka, with a potential valuation of up to $5 billion for the start-up, a source said.
The nine-year-old Indonesian company, which counts Expedia and China’s JD.com among its backers, last year launched Paylater credit cards with some Indonesian lenders. It also offers insurance and wealth management services.
DRIVING RECOVERY
The company’s president, Caesar Indra, said Traveloka’s Vietnam business had surpassed pre-Covid-19 levels, is nearly back to normal levels in Thailand, and is at half of pre-Covid level in Indonesia. “The worst has happened and now we’re well prepared for 2021. Domestic travel is driving recovery,” he said.
“The plan is to invest in fintech in a big way to allow more consumers to travel in the region,” Indra said, adding that the travel business had returned to profitability in late 2020.
“We recently formed a joint venture with one of the largest banks in Thailand to collaborate in the fintech space,” Indra said. Traveloka, which has smaller local rivals, is also talking to potential partners in Vietnam.
Traveloka’s two-year-old equivalent service in Indonesia, launched after the firm realised that customers would wait until their paydays to book travel, has already facilitated more than 6 million loans, Indra said.
CARDS POTENTIAL
Indra said the business potential was huge in Indonesia, South-east Asia’s largest economy, where only 6% of the population of 270 million has credit cards.
When asked whether Traveloka might buy a bank in Indonesia, like other start-ups, to expand its financial services, Indra said: “All options were on the table.”
Traveloka, also backed by Singapore sovereign wealth fund GIC and Indonesian venture firm East Ventures, has grown its local lifestyle services in Indonesia, where it offers restaurant vouchers and a food delivery service, as well as a popular rapid Covid-19 testing.
- Reporting by Reuters
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