Indonesia-based online travel portal, Traveloka, has picked up $250M in fresh funding to beef up its coronavirus-battered balance sheet.
The travel aggregator dubs the capital injection a “strong vote of confidence” in its strategy to adjust to what it couches as a ‘new normal’ for travel by retooling its focus on domestic and short hop excursions and activities. The funding round is led by an unnamed global financial institution. Traveloka also says “some” existing investors also participated (EV Growth being one it has named).
Prior to this latest raise, Traveloka had pulled in around $950M across five funding rounds since being founded back in 2012, according to Crunchbase. Back in 2017 it passed unicorn valuation after bagging $350 million from Expedia in exchange for a minority stake in the business. But, shortly afterwards, it lost one of its co-founders — who departed citing a clash of goals as the business switched to more of a commercial mindset, as he saw it.
Fast forward a few years and the pandemic is playing havoc with the travel industry as a whole. Since the pandemic landed to decimate ‘business as usual’ in the sector, Traveloka has responded by launching a number of initiatives in a bid to reassure and woo back customers — including flights that bundle COVID-19 tests; flexible open-date vouchers for hotels (aka, ‘Buy Now Stay Later’); online experiences; flash sale livestreams; and a big push around cleanliness with standardized hygiene protocols for vacation accommodation that can be booked via its platform.
Traveloka says the latest capital injection will be used not only to beef up its balance sheet but to boost efforts and deepen offerings in “select priority areas” — including building out what it describes as “a more robust and integrated Travel & Lifestyle portfolio” in key markets.
It also intends to expand financial services solutions it offers to ecosystem partners.
Commenting in a statement, Ferry Unardi, Traveloka co-founder and CEO, said: “Without a doubt, Traveloka has been profoundly affected by the COVID-19 pandemic. We have experienced the lowest business rate that we have ever seen since our inception. However, we always believed that the company will prevail by rapidly adjusting our strategy, working with our industry and ecosystem partners, as well as continuing to innovate for our users, our ultimate focus.”
Per Ferry, Traveloka’s business in Vietnam is “approaching” steady pre-COVID-19 levels, while he says its Thailand business is “on its way” to surpassing 50%.
“Indonesia and Malaysia are still in the early stage, but they continue to demonstrate promising momentum with strong week-to-week improvement, especially in accommodation with the emergence of shorter distance staycation behavior,” he added. “We acknowledge that the sector may go through further turbulence as it navigates new waves, but we feel we are prepared to take on the challenge and emerge on the right side of it.”
“The travel industry is facing unprecedented times, including Traveloka,” added Willson Cuaca, managing partner of EV Growth, in another supporting statement. “The leadership team has taken difficult yet commendable measures including restructuring and optimization to minimize financial health risks. We are confident that the company will emerge even stronger after this crisis.”