JAKARTA (TheInsiderStories) – Minister of Communications and Informatics Rudiantara expects the Indonesia Capital Market Authority, in this case the Financial Services Authority, to issue regulations for startup companies holding a ‘unicorn’ status to be able to conduct initial public offerings (IPO) in the local stock exchange.
“If they want to go public here, the rules have to be set because in the meantime there are no specific regulations for this business model,” said Rudiantara in The Insider Stories seminar ‘Indonesia Outlook: How We Strive in Sharing Economy Era’ at Indonesia Stocks Exchange (IDX), Wednesday (17/1).
Therefore, he continued, all the ecosystems associated with the capital market, whether on the part of the community or investors, fund managers, and stakeholders in the Indonesian capital market, should share the same approaches.
He said that one of the factors that have become an obstacle for unicorns to conduct an IPO is stock price valuation. Thus the government and the authority will carry out an assessment of unicorn companies.
“I hope we can soon prepare the ecosystem; moreover; we already have four unicorns, so we have more incentive,” he said.
He said if these unicorns are not attracted to launch IPO in local market, they could launch IPO in overseas stock markets. Therefore, the authorities should facilitate these unicorns to list shares on the Indonesian Stock Exchange.
“Sooner or later, the initial investors in these unicorns would have to find ways to exit from these unicorns (to realize gains)
Currently, he added, his secondary focus is to increase the number of unicorns in Indonesia. By 2019, he believes, there will be more than five companies in Indonesia that will bear the unicorn status.
“Now there are four, we see there will be five in 2019. With the right strategy even more will emerge,” he said.
Investor confidence in Indonesia’s startup market is rising with investment growing 68 times over the past five years to reach US$1.4 billion in 2016, jumping to US$3 billion in the first eight months of 2017.
Due to such massive growth, the value of startup investments in Indonesia may surpass the nation’s oil and gas investments, which stood at US$5 billion in 2016, according to AT Kearney.
In 2017 95 per cent of the total investment value in Indonesian startups came from China, with only 6 per cent coming from other sources.
China’s Tencent invested US$1.2 billion in Go-Jek, Alibaba Group invested US$1.1 billion in Tokopedia and JD.com invested US$500 million in Traveloka.
Venture capitalists (VCs) remain extremely bullish on Indonesia as an investment opportunity, given the country’s growing economy, emerging middle class and massive population of digitally-savvy young people.
Recently, Bukalapak CEO Achmad Zaky announced that the e-commerce platform had officially become Indonesia’s startup unicorn, as the company was now valued at over US$1 billion.
This achievement has made Bukalapak the country’s fourth unicorn startup after ride-hailing app Go-Jek, online booking platform Traveloka and e-commerce platform Tokopedia.
Written by Elisa Valenta, email: firstname.lastname@example.org