Traveloka has secured $300 million in new financing from investors including BlackRock Inc., as Southeast Asia’s biggest online travel startup counts on a post-Covid rebound to expand in the region.
The Jakarta-based company said in a statement it struck a deal for financing with investors including Allianz Global Investors and the Indonesia Investment Authority.
The size of the funding round is significantly larger than the previously discussed target of about $200 million that Bloomberg News reported in June. Traveloka, backed by investors including GIC Pte and Expedia Group Inc., is considering an initial public offering in the U.S. or in Indonesia, according to a person familiar with the matter, who asked to remain anonymous discussing a private matter.
The fresh funds strengthen Traveloka’s balance sheet and allow it to invest in its core business, President Caesar Indra said in an interview with Bloomberg Television’s Haslinda Amin, David Ingles and Rishaad Salamat in Singapore.
Southeast Asia’s tourism industry plunged into crisis during the pandemic when lockdowns all but brought travel to a halt. Traveloka ventured into financial services during the pandemic by partnering with banks including PT Bank Rakyat Indonesia and PT Bank Negara Indonesia. Representatives for the startup declined to comment.
What Bloomberg Intelligence Says
The revenue of Southeast Asian online travel agents (OTAs) might gain from the speedy rebound in domestic and international travel in the region, helped by high smartphone ownership and low penetration of brick-and-mortar travel agencies. We expect industry leader Traveloka to grow faster than rivals such as Tripadvisor and Booking Holdings, with our scenario projecting sales to expand by more than 40 percent from 2021-25 vs. the industry’s 36 percent. Traveloka, along with Indonesia’s Tiket.com, appears more able to weather industry challenges, the most crucial of which is achieving profitability amid IPO plans.
Many countries are now removing pandemic-era restrictions and reopening borders. For example, Thailand — where international tourism contributes about 12 percent to gross domestic product — has seen a rush of foreign travelers in recent months after scrapping restrictions in July.
Traveloka envisages a full recovery from the pandemic by 2024, Indra said. “We are very optimistic that domestic travel will drive the recovery, followed by international recovery,” he said.
Regional startups are raising funds despite worries about a global economic downturn, hoping to position themselves for an eventual rebound. Traveloka helps consumers book a range of services including airline tickets and hotels as well as spas and tourism attractions. It also offers food delivery and financing, payment and insurance products. Its app has been downloaded more than 100 million times, according to its website.
The valuation of the deal is unclear. Traveloka had been valued at $3 billion, according to CB Insights, but Bloomberg News reported in 2020 that it was seeking funds at a lower valuation.