JAKARTA (TheInsiderStories) – Indonesian travel apps, Traveloka announced that the company has raised approximately US$500 million through investments from global online travel leader Expedia, Inc. (NASDAQ: EXPE), East Ventures, Hillhouse Capital Group, JD.com and Sequoia Capital within the last year.
The investment highlight confidence in the company and potential of Southeast Asia travel market. It also conferred a $2 billion valuation on local online travel startup.
Traveloka said, the investment by Expedia will deepen the existing partnership in hotel supply, allowing the company to provide even greater selection of international accommodations inventory to Southeast Asian travelers.
“Partnering with the world’s leading online travel company will allow us to focus on our continued growth in the online travel space to meet our goal of providing travelers the best travel options and highest quality booking experience,” said Ferry Unardi, Co-founder and Chief Executive Officer, Traveloka.
“Our partnership will benefit from each side’s expertise and local knowledge, and accelerate our mutual growth,” said Dara Khosrowshahi, President and Chief Executive Officer, Expedia, Inc.
Expedia, Inc. is a globally recognized international online travel company, and this latest investment in Traveloka affirms the scale of and surging international interest in the Asia Pacific travel sector. In particular, Southeast Asia is expected to reach $83 billion in tourism receipts in the region by the end of 2017 according to ASEAN.
With the latest round of investments, Traveloka will continue to focus on delivering the best travel experience by developing Research & Development projects through artificial intelligence and machine learning capabilities.
The company specializes in localizing offerings, such as localized payment methods, as well as local customer service in their native languages. Building the best end-to-end products and services is key to the success of Traveloka.
Traveloka is an online travel company that provides a wide range of travel needs in one platform. The company has established partnerships with more than 100 domestic and international airlines, serving more than 200,000 routes worldwide.
It also has the largest direct accommodation inventory, varying from hotels, apartments, guest houses, homestays, to villas and resorts. Traveloka provides more than 40 payment options for consumers in Indonesia, Thailand, Vietnam, Malaysia, Singapore and the Philippines.
Additionally, its mobile application has been downloaded more than 20 million times, making it the most popular travel booking app in the region. Indonesia is also a leading mobile-first nation, with more than 70 percent of its Internet traffic on mobile devices.
It’s a set of circumstances that has helped Indonesia to develop three unicorns (private companies worth more than $1 billion). The companies, sustained by local demand, highlight the nature of the opportunity.
Tokopedia, founded in 2009 and now reportedly worth about $1 billion, that allows people to open their own online store to sell everything from shoes to screwdrivers. Online travel reservation firm Traveloka, founded in 2012 and also acknowledged to be valued at more than $1 billion, ride-sharing company Go-Jek valued at $1.3 billion.
These three companies together demonstrate that Indonesia is a market where venture capitalists can back entrepreneurs that are building businesses based on proven models. That’s possible because consumers have essentially the same needs all over the world. With small tweaks, these ideas can become near-sure solutions for their local market.
However, the three companies also underscore a lesson learned from China: You cannot just drop a Western company into a unique Asian culture and expect it to thrive without alteration. Like China, many local Indonesian startups are service companies that require intense local activity and execution, giving an opportunity for them to build market leadership that could eventually lead to a local stock market listing.
As China’s technology market matures, domestic Chinese VCs are increasingly looking abroad for the next big thing. In June last year, seven members of the so-called China Angels, a small group of influential entrepreneurs and investors, including Xu Xiao Ping, founder of the Zhen Fund, China’s largest seed-stage investor, and Kai Fu Li, founder of the Sinovation Fund, a $1.3 billion venture fund, came to Indonesia.
The group met with the founders of Go-Jek and Tokopedia at their offices and with more than a dozen early-stage ventures. Minister of Information and Communication Rudiantara has said that Indonesia wants to create lot of unicorn in e-commerce business with total assets more than Rp10 trillion.
To support the goal, President Joko Widodo government allowed foreign company to have 49 percent of stake in local e-commerce player through a negative list rules has been launched in 2016.
Indonesia eyeing e-commerce become a market worth an estimated $130 billion by 2020 from now around $8 billion. The region of more than 600 million is home to an online travel market predicted to quadruple to $90 billion by 2025, according to a report by Google and Temasek Holdings Pte.
(Written by Linda Silaen, Email: firstname.lastname@example.org)