Indonesia is heating up as an IPO destination for startups

It’s been a good year for the Indonesian Stock Exchange (IDX).

For the first time, Indonesia surpassed Singapore in terms of the volume and value of initial public offerings (IPOs), advisory firm Duff and Phelps revealed.

While technology isn’t the most dominant industry in the IDX, the category saw a spike in listings in 2017 and this year, with five startups raising a total of US$78 million.

It’s a curious phenomenon because the IDX has never been known to be a destination for tech firms.

Online-to-offline payments provider Kioson is the first of a wave of startups to list on the IDX. It raised US$3.3 million last September and was oversubscribed by more than 10 times in its trade debut.

So why did the company choose an IPO instead of the venture capital route that most startups take? Kioson’s president director Jasin Halim believes that the public perception of his product would lead to a fairer valuation of his company on the stock market.

The listing was Kioson’s first fundraising round after its seed investment in 2017. Halim likens the IPO to a series A round. To date, the stock has climbed 537 percent, closing at US$0.20.

“We never seemed to find a match between venture capital valuations and the valuations that we wanted. One conclusion [we’ve come to] is maybe the investors didn’t know the business well enough,” Halim tells Tech in Asia.

Indeed, Kioson’s key product, which provides logistics and e-payment services via warungs or local convenience stores may be lost on some investors, particularly foreign ones, whose idea of Indonesia might be confined to just Jakarta.

Kioson has nearly 39,000 kiosks throughout Indonesia, mainly in Java and Sumatra. These kiosks are run out of mobile phone apps and earn warung owners a side income.

“To them, this is something very new. Investors who come to Indonesia visit just the capital cities. But there is a lot more to Indonesia besides Jakarta,” Halim adds.

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