Mitra lays foundation of Bukalapak’s road to profitability

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Hello reader,

I never took up business valuations as a subject in college. The countless variables involved in determining a company’s economic value often leaves me bewildered.

However, the concept of conglomerate discounts, which adds another layer of uncertainty to the valuation process, piqued my interest. The concept made me realize that well-performing businesses can mask the struggles of their ailing verticals for a period of time by putting them under the umbrella of a conglomerate.

That brings us to Indonesia’s Bukalapak. With the firm’s ecommerce business losing ground to those of rivals Tokopedia and Shopee, its Mitra business, an online to offline (O2O) service that helps small retailers (locally called warungs) procure physical goods to sell, has taken center stage.

Today’s featured piece highlights how Mitra’s meteoric rise led to Bukalapak pivoting its core strategy away from its struggling marketplace arm.

The premium story also sheds light on the firm’s recent investments in a local digital bank and an e-grocery firm and how it is trying to build an ecosystem – akin to that of GoTo and Sea Group – with its Mitra unit at the center.

As to whether there is a possible conglomerate discount at play for Bukalapak, whose valuation has fallen more than 70% over last year on the stock market, that’s a question for the investment managers and bankers of the world to answer.

Today we look at:

• How Mitra became Bukalapak’s bread and butter
• Singapore-based Klook’s phenomenal sequential rise in quarterly revenue
• Other newsy highlights such as Grab still being a long way from breaking even and ByteDance signing off on its US$3 billion share buyback plan

— Shravanth

Premium summary

Pivot, pivot, PIIVVOOTTT!!

Image credit: Timmy Loen

If you’re a regular reader of Tech in Asia’s newsletters, you’re probably already aware of some past sensational business pivots in the industry. Fret not if you aren’t a regular, as we’ve highlighted a few here for you to catch up on: the unusual birth of Slack and Flickr and the contrasting fortunes of Netflix and Zillow.

Klook at this

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