Fore Coffee defies IPO playbook in bid to revive Indonesian tech

By some measures, Fore Coffee’s listing is rather unusual for an Indonesian tech IPO.

The coffee chain is neither an ecommerce marketplace nor a super app, and unlike the typical tech startup, it was the result of East Ventures’ in-house incubation efforts. The coffee chain also went public at a less-than-auspicious time for Indonesia’s economy.

But Fore also made one curious decision: setting a self-imposed 12-month lockup period. That means existing investors cannot sell their shares for one year after its IPO – longer than the eight months mandated by the Indonesia Stock Exchange (IDX).

Fore Coffee team at IPO day / Photo credit: Fore Coffee

When GoTo and Bukalapak listed on the IDX, both had opted for an eight-month lockup. But as both companies’ shares have cratered after their IPOs, it might help Fore’s case to draw a line in the sand.

“I have been working for months to educate the market that [Fore’s] IPO is not an exit, and we self-lock all existing investors for one year,” Willson Cuaca, East Ventures’ managing partner, tells Tech in Asia.

So far, that strategy is working. On its first day as a listed company, Fore’s share price rose by 34% – close to hitting the IDX’s upper daily limit. By April 16, two days after its listing, its share price had grown further to 392 rupiah (US$0.02) per share – more than 2x its IPO price.

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Cuaca’s mission

Unlike GoTo, Bukalapak, and Blibli, Fore was already profitable at the time of its listing. Perhaps reflecting the company’s smaller size, its IPO price of 188 rupiah is lower than those of the other three.

But this figure was also set because Fore’s approach is not about optimizing its valuation, Cuaca points out. According to the company’s prospectus, the underwriters suggested a price range of 160 to 202 rupiah per share.

“We picked 188 rupiah, which is not the highest [of the] range,” he explains. “We want investors who believe in us [to] expect increments in the stock price.”

That increment did materialize, with prices now exceeding the IPO range’s upper end. It’s an even higher jump for existing investors: Based on a nominal price of 70 rupiah as per the prospectus, investors who came in prior to the IPO have seen their share values rise about 5.6x.

But Cuaca is quick to emphasize that these are unrealized gains and will remain so until the 12-month lockup expires.

“Southeast Asia has suffered from a lack of good IPOs,” he says, adding that the lockup period is part of the VC’s “personal mission” to help restore confidence in the industry.

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