Part 1 covers the origins of Traveloka and the company’s build-out from flight listings to much, much more.
There have been turbulent moments for Traveloka’s top brass.
In 2018, Derianto Kusuma stepped down from his position as chief technology officer and left the company for good, citing a “clash of aspirations.”
Then, in 2020, travel restrictions meant bookings ground to a halt during the pandemic, jeopardizing the company’s survival. Traveloka had to lay off around 100 people, or about 10% of its workforce, in April that year. By August, it had cleared nearly USD 100 million in refunds. But fast pivots to new services offered a lifeline, and Traveloka was able to pull though as a company.
Today, Ferry Unardi is still at the helm as CEO, with Albert still on board and overseeing day to day operations as company co-founder. Other senior leaders include former BCG consultant Caesar Indra, president; serial entrepreneur Alfan Hendro, chief operations officer; and chief technology officer Ray Frederich, who has around 20 years’ experience in global tech companies and consulting firms.
The pandemic isn’t over, but Traveloka has already proven that it can pull through a situation that decimated businesses of all sizes. Its heads say the company has emerged “stronger” than before the coronavirus reached all corners of the planet, and is ready for its ticker symbol in the coming months.
Survival and revival
In 2020, when new travel bookings evaporated overnight and refunds were mounting, Traveloka needed cash—fast. Taking a leaf from one of its fintech services, the company kicked off the “Buy Now, Stay Later” campaign, where users could pay for hotel vouchers and use them at a later date. Traveloka Xperience hosted online activities like cooking classes with professional chefs. Flash sale livestreams and live tours gave people who were stuck at home pleasant distractions, perhaps even planting ideas for vacation destinations when international travel resumes.
All of those initiatives kept Traveloka on its feet at a critical time. Now, with lockdowns easing in Southeast Asia, the platform’s traffic is rising to pre-pandemic levels.
More broadly, the company’s core business, travel, is recovering. Traveloka’s transaction volume is roughly about 50% now, according to Traveloka head of corporate communications Reza Juniarshah.
“Since July last year, recovery has been consistent across all of our markets, particularly in Thailand, Vietnam, and Indonesia. With the successful implementation of COVID-19 management measures in Thailand and Vietnam, consumers’ confidence in travel is increasing. In Indonesia, domestic travel is on the rise, especially with the spike of staycation trends, which is gradually contributing to Indonesia’s tourism sector recovery,” Juniarshah said.
Making it through the pandemic and roaring back to business in the past months has put wind in Traveloka’s sails. The company is one of a handful of Southeast Asian tech powerhouses racing for IPOs in New York in 2021. Earlier this year, Unardi told Bloomberg that the company was examining pathways to go public. Early investor Willson Cuaca, co-founder and managing partner of East Ventures, welcomes this plan. The company’s track record through the pandemic proves that Traveloka is mature enough to see its shares traded publicly, Cuaca believes.
Primed for an offering
“Traveloka is ready for the public this year and 2021 is just the right time. Their crisis response was working well since last year. By the end of 2020, they have hit profitability and as the world recovers after vaccinations, I believe Traveloka is well-positioned to recover strongly too,” Cuaca said. Traveloka carries a market valuation of around USD 3 billion at the moment, but Cuaca believes that the number “should be worth much higher than what is speculated.”
1982 Ventures’ Herston Powers also believes 2021 presents a sweet spot for Traveloka to list its shares on the public market. With the company turning a profit and the performance of Sea Group’s shares as a guidepost, there is probably a no better time than this year for Traveloka and other Southeast Asian tech companies to head to Wall Street.
“The window is open and companies now have multiple paths to a listing, such as a traditional IPO, SPAC, or direct listing. We are concerned that the IPO window will close before we see the next wave of meaningful exits from the region,” Powers said.
Powers added that US investors are already betting on global travel and hospitality to pick up rapidly. “Airbnb’s IPO and stock performance demonstrate investors’ interest in the sector, and we expect the enthusiasm to spread to Southeast Asia and South Asia. Consumers in fast-growing emerging markets, like Indonesia, have become accustomed to traveling and leisure, and this trend will not stop even if it took a pause during the early days of the pandemic.”
Traveloka has raised a total of USD 1.2 billion in six rounds, according to Crunchbase. It counts JD.com, Sequoia Capital, and Hillhouse Capital Group as investors. In 2018, the unicorn quietly acquired three rivals—PegiPegi in Indonesia, Mytour in Vietnam, and TravelBook in the Philippines—from Japanese firm Recruit Holdings for USD 66.8 million. This move gave Traveloka a strong foothold in Southeast Asia and it now leads the OTA space in the region.
The company has also made investments in several regional startups, such as insurtech platform PasarPolis as well as loyalty and marketing platform Member.id in Indonesia, Singapore’s event tech firm PouchNation, and Vietnamese POS software developer KiotViet. Traveloka is one of two Indonesian unicorns that has a strong presence in the region (the other is Gojek), giving it cachet as it heads to a stock exchange.
“Timing will be critical for Traveloka, as capital markets are always about timing. You need institutional investors to be in risk-on mode. If the markets crash, nobody will be going out for an IPO,” said Powers. “Outside of a major market correction or another pandemic, we are extremely bullish on Traveloka’s prospects as a listed company.”
Traveloka has reportedly held discussions with several blank check companies, including freshly formed entities like Bridgetown Holdings and Provident Acquisition. However, the firm has yet to reveal details about its IPO preparations. Traveloka’s top executives have expressed their optimism for the company’s future on various occasions. Making it through the pandemic relatively unscathed was a landmark accomplishment. Now, the firm has to prove that it’s mature enough to follow a path first opened up by Singapore’s Sea Group and head to New York.
KrASIA is a digital media company reporting on the most promising technology-driven businesses and trends in the world’s emerging markets.