(Bloomberg)—SoftBank Vision Fund and Alibaba Group Holding Ltd. led a $1.1 billion investment in PT Tokopedia, a financing round that will help Indonesia’s biggest online marketplace venture beyond e-commerce into new areas such as air tickets and insurance. Tokopedia is No. 18 in the Internet Retailer 2018 Online Marketplaces.
The company was valued at more than $7 billion after the funding, according to people familiar with the matter, who asked not to be identified as the information is private. That would put it at the top of CB Insights’ ranking of Indonesian startups. SoftBank Ventures Korea and other existing backers joined the round, Tokopedia said in a statement without detailing its valuation.
The funding, which Bloomberg first reported last month, underscores the Jakarta-based company’s ambition to broaden its business by investing in logistics, fulfillment, payments and financial services. It aims to help millions of merchants, from mom-and-pop stores to farmers, improve margins, restock faster and gain access to financial services, CEO William Tanuwijaya said in an interview.
“We ultimately can help these businesses serve their customers better,” he said. “If we can do all of that, we will be one step closer to our mission, to democratize commerce—both online and offline—through technology.”
Tokopedia’s latest round comes after a 2017 financing of the same amount, led by Alibaba, the company said. The influx of capital will help it better compete in an increasingly vibrant internet space: Southeast Asia’s most richly funded startups are starting to resemble Chinese internet giants such as Alibaba and Tencent Holdings Ltd., which offer customers a plethora of on-demand mobile services to go along with digital wallets.
Grab and Go-Jek, for instance, began as ride-hailing platforms but evolved into apps offering other services centered around payments and food delivery. Like its backer Alibaba, Tokopedia already offers flight and train tickets as well as access to attractions and events, encroaching on the domain of online travel companies like PT Traveloka.
Tanuwijaya, the 37-year-old son of a factory worker, co-founded the company in 2009 and has capitalized on the country’s rapid adoption of smartphones and increasing comfort in shopping online. He previously cited a 2014 meeting with SoftBank’s billionaire founder, Masayoshi Son, as a turning point for the company. Indonesia’s internet economy is now the largest and fastest growing in Southeast Asia with e-commerce poised to be worth $53 billion by 2025, according to Google and Temasek Holdings Pte.
“Tokopedia already provides millions of consumers with access to more than 100 million products,” said Lydia Jett, a senior investor at SoftBank Investment Advisers, which oversees the Vision Fund. “The company is well-positioned to serve millions more as internet adoption continues to grow rapidly in the region.”
Tokopedia was No. 1 in terms of monthly web visits in the third quarter, according to market researcher iPrice Group, which used SimilarWeb data. It was followed by Bukalapak, Shopee and Lazada Group (No. 17), a unit of Alibaba. Tanuwijaya’s startup currently serves 93% of districts in Indonesia. In the past year, it has quadrupled its gross merchandise value and now provides same-day delivery to a quarter of its customers, according to the company.
Alibaba owns and operates Taobao and Tmall, which hold the No. 1 and No. 2 spots on the Internet Retailer Online Marketplaces.