Alibaba, Softbank Lead $1.1 Billion Funding Round for Indonesia's Taobao
Alibaba Group and SoftBank Vision Fund have led a $1.1 billion funding round in PT Tokopedia, Indonesia’s answer to Taobao, following the Chinese e-commerce giant’s first investment in Tokopedia last year.
The latest round is set to help Alibaba Group Holding Ltd. up its stake in the burgeoning e-commerce scene in Indonesia, the region’s largest economy. Alibaba already has a payment and e-commerce presence in Thailand, Singapore, Indonesia and Malaysia.
With a population of around 650 million, Southeast Asia has become a new battleground for Chinese e-commerce behemoths looking to expand overseas.
The Indonesian internet economy is forecast to grow to $100 billion by 2025, when it will account for $4 of every $10 spent in the region, according to a report co-authored by Google LLC in November.
Founded in 2009, Tokopedia is Indonesia’s largest online marketplace. It competes against Singapore-based Lazada Group SA, which has a presence in six Southeast Asian markets. Lazada is owned by Alibaba.
Tokopedia said in a statement (link in Indonesian) on Wednesday that it will use the new funding to build technology and infrastructure for business expansion. It will continue to focus on the Indonesian market and “drive economic development and financial inclusion” in the country.
The company didn’t reveal its valuation after its latest funding round, but news website TechCrunch reported its value at around $7 billion.
Tokopedia reaches more than 90% of districts across Indonesia’s 17,500 islands, and offers same-day delivery on 25% of its transactions. The company said it had quadrupled its gross merchandise value — the total amount of goods sold on its website — in the past year. It didn’t reveal the figure.
Alibaba’s smaller rival, JD.com Inc., joined with Central Group, Thailand’s largest retailer, to launch a local e-commerce portal, JD Central, in September.
JD.com’s Thai venture follows forays into Indonesia, where it runs a local subsidiary and an unmanned convenience store; and Vietnam, where it spent an undisclosed sum to back local e-commerce firm Tiki.vn this year.
Softbank Vision Fund was launched in 2016 by the Japanese tech conglomerate as a nearly $100 billion investment vehicle to fund rapidly growing startups. It has attracted around $93 billion from the likes of Saudi Arabia’s Public Investment Fund, and Apple Inc.
Contact reporter Jason Tan (firstname.lastname@example.org)
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