Traveloka bags $250m as it recovers from Covid-19

Indonesian travel unicorn Traveloka today announced it has raised US$250 million in a funding round led by a global financial institution, along with existing investors.

The new capital injection is expected to further strengthen Traveloka’s balance sheet and boost efforts to deepen its offerings in select priority areas, including building a travel and lifestyle portfolio in key markets as well as expanding its financial services solutions, according to a statement.

Photo credit: Traveloka

The company said it has witnessed a “historic drop” in business activity as Covid-19 severely hit the travel and tourism sectors, significantly disrupting businesses for its partners.

“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,” said Ferry Unardi, co-founder and CEO of Traveloka.

The company saw daily requests for refunds and booking rescheduling increase by as much as 10x since February. It was also reported that the company cut 100 employees, or 10% of its workforce, in April amid the pandemic.

In May, the company’s strategic partner Airy, an aggregator of budget hotels in Indonesia, shut down due to “a significant technical decline and a reduction in human resources.”

“The travel industry is facing unprecedented times, including Traveloka. The leadership team has taken difficult yet commendable measures, including restructuring and optimization, to minimize financial health risks,” Willson Cuaca, managing partner of EV Growth, said.

Traveloka, however, said it’s seeing “encouraging recovery” across all of its key markets in domestic, short-distance travel, and activities bookings. Its business in Vietnam, for example, is approaching pre-Covid-19 levels, while its Thailand unit is on its way to surpass 50%.

Although Indonesia and Malaysia are still in the early stage of recovery, Traveloka said they are making week-to-week improvement, especially in the accommodation segment, as demand for shorter-distance staycation emerges.

“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,” Unardi said.