After $1.5b IPO, Bukalapak explores new frontier: gaming

Unlike many of its fellow Indonesian unicorns, Bukalapak is rarely associated with investments and acquisitions. In fact, it made just one publicly disclosed acquisition over a whole decade.

However, that changed around the time of its US$1.5 billion IPO last year. But while much of the spotlight has fallen on Bukalapak’s banking and retail investments, the ecommerce company appears to be laying the groundwork for a different sector: gaming.

Bukalapak CEO Willix Halim (left) with Mitra Bukalapak CEO Howard Gani (right) / Photo credit: Bukalapak

In May 2021, Bukalapak acquired 500 Global-backed Itemku, an online marketplace for game-related digital products. This was followed at the end of the year by an investment in Yield Guild Games Southeast Asia (YGG SEA), a blockchain gaming startup.

But an even bigger sign came earlier this month, when Bukalapak indicated in a job advertisement on LinkedIn that it’s seeking a “CEO of Gaming.”

An entry into gaming will undoubtedly invite comparisons to Sea Group, whose gaming arm Garena provided the necessary cash flow to invest in its ecommerce unit Shopee and fintech division SeaMoney. But it would also let Bukalapak take advantage of its Mitra Bukalapak network of agents.

Still, Bukalapak is deliberately taking a slower, more methodical approach – not just in gaming, but in its overall investments and M&A strategy – especially as it deals with public market scrutiny.

“Yes, we’ve been conservative in the number of deals we’ve done, but having a high deal volume doesn’t mean that the acquisitions are successful,” says Teddy Oetomo, Bukalapak’s president.

Sea comparison

At the time of the Itemku acquisition, Willix Halim – Bukalapak’s then-COO (now CEO) – said that the unicorn hoped to “meet the needs for digital gaming in Indonesia and make digital games accessible for all Indonesians.”

Doing so means distributing digital products sold on Itemku’s marketplace – like game items and video game currency (such as weapons, gems, and skins) as well as various types of vouchers – through Mitra Bukalapak’s network of agents spread across the country.

Interestingly, the notion of leveraging Bukalapak’s sizable agent network, which largely consists of mom and pop shops or warungs – also drove the company’s investment in YGG SEA, according to an executive familiar with the deal.

The Itemku team / Photo credit: Itemku

Bukalapak declined to comment when asked about why it backed YGG SEA. However, the executive explains that Bukalapak’s investment is based on its vision of a world where shop owners will be playing play-to-earn (P2E) games during downtimes to earn additional income.

Playing it right