Tokopedia, an online marketplace in Indonesia, has raised an impressive $100 million round led by SoftBank Internet and Media (SIMI), with participation from Sequoia Capital and returning investor SB Pan Asia Fund. The valuation was undisclosed.
The investment is the second major one announced in Southeast Asia this week, which points to increasing investor interest in the region. Yesterday, Malaysia-based taxi-calling app GrabTaxi said that it raised $65 million to increase its competition against Uber in Southeast Asia.
Founded in 2009, Tokopedia is currently Indonesia’s largest online marketplace and, like Flipkart, Amazon India, and Alibaba.com, allows individual vendors to set up shops. Tokopedia says it will use the new funding to acquire new users and hire more employees. SoftBank, which along with Sequoia Capital will add representatives to Tokopedia’s board of directors, plans to use its investment in Tokopedia as part of its goal to become the “No. 1 Internet company in Asia.”
It’s important to note that online marketplaces like Tokopedia and its peers have very thin product margins, which means that they have to grow through economies of sale. For example, earlier this year Alibaba bolstered its Southeast Asian logistics network with a $249 million investment in Singapore Post Limited (SingPost), the first overseas postal agency that Alibaba has invested in. SIMI and Sequoia Capital’s investment may be a sign that they believe Tokopedia is a likely candidate for acquisition by FlipKart, Amazon, or Alibaba as those companies look to expand into the growing Southeast Asian online retail market.
In a statement, Nikesh Arora, vice chairman of SoftBank and CEO of SIMI, said, “In the Asia region, the growth potential for online marketplaces particularly stands out in Indonesia, and since their founding, Tokopedia has seen remarkable growth with their innovative business model. Leveraging synergies with our network of Internet business, we are confident we can help Tokopedia’s success in the Indonesian market.”