Indonesian travel tech unicorn Traveloka is now exploring options for a conventional initial public offering in the United States, according to a report by DealStreetAsia. The company reportedly suspended merger talks with Bridgetown Holdings, a special purpose acquisition company backed by Richard Li and Peter Thiel. The declining interest in SPAC mergers and low interest in travel firms from institutional investors were cited for the change in plans.
A company’s financial performance, valuation, and potential growth rate are among the key factors that affect its plans for an IPO. When the COVID-19 pandemic began to spread in Southeast Asia, Traveloka’s business, like that of operators in the travel and hospitality sectors, was severely affected. Traveloka had to lay off around 10% of its workforce in April that year. Then, four months later, it cleared nearly USD 100 million in refunds.
To sustain its cash flow during the crisis, Traveloka introduced a number of new services to attract customers, including a “Buy Now, Stay Later” campaign and online activities hosted by tour guides and influencers on Traveloka Xperience. In March, Traveloka’s core travel business began to recover in all of its main markets. The company also entered the food delivery sector by launching Traveloka Eats Delivery earlier this year. A Traveloka spokesperson told local media that traffic for the service doubled when Indonesia implemented emergency social restrictions in July.
Traveloka is consistently strengthening its fintech business, which encompasses “buy now, pay later,” bill payments, and insurance. The firm recently made an investment in e-commerce enabler Sirclo to expand fintech services beyond its own platform.
The firm’s head of corporate communications, Reza Juniarshah, said that Traveloka remains committed to taking the company public and is considering the available options. “We continue to be well capitalized and are focused on choosing a path and timing that is in the best interests of the company and its stakeholders,” he told KrASIA.
SPAC listings became popular investment choices in the United States in 2020, but that enthusiasm has since tapered off. The total value of SPAC IPOs in New York during Q2 2021 dropped to USD 11.7 billion from USD 91.4 billion in Q1 2021, with the number of deals declining to 52 from 275, according to an S&P Global Market Intelligence report. The slowdown was due to enhanced regulatory scrutiny of SPACs from the US Securities and Exchange Commission (SEC).
Nonetheless, some Southeast Asian tech companies have SPAC mergers in the works and are expected to go public in the US. Grab is set to list on the Nasdaq by the end of 2021 by merging with a blank check company, Altimeter Growth Corp. PropertyGuru has also agreed to a merger deal with Bridgetown 2 Holdings. Other companies such as GoTo and Carousell have expressed their intentions to explore a similar option. The Singapore Exchange recently issued new rules to allow SPACs to list on its mainboard in a move to lure regional companies to go public in the city-state.
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