Amid losses and market decline, can Superbank justify an IPO?

In a surprising move, Superbank – which is backed by Emtek Group, Grab, KakaoBank, and Singtel – is reportedly looking to raise between US$200 million and US$300 million in an IPO in Jakarta this year.

This might seem risky, since the digital bank is still a new entity (it was only publicly launched in June 2024), loss-making, and seeking a valuation that is at a premium to its competitors. Investors have plenty of other options to choose from, and unlike Superbank, they are profitable.

Execs from Superbank and its shareholders / Photo credit: Superbank

Indonesia is already home to many publicly listed digital banks like Bank Jago, Bank Neo Commerce, and Bank Aladin. Superbank is also competing with the digital banking arms of conventional banks such as Blu by BCA, Hibank by BNI, and Bank Raya by BRI.

Foreign competitors like GoTyme and Yup, which have recently raised hundreds of millions of dollars in funding, are also targeting Southeast Asia’s biggest economy.

Risky move?

Nailul Huda, director of digital economics at the Center of Economic and Law Studies, believes that Superbank should “proceed with caution” if it plans to go public.

He argues that the company’s loss-making financial position could lead to negative investor sentiment. “Even though Superbank’s tech is what’s being sold, in banking, the evaluation goes beyond that, particularly [focusing on] profitability and assets,” Huda tells Tech in Asia.

In the first nine months of 2024, Superbank’s losses widened by 12% year on year to 286 billion rupiah (US$17.4 million).

This was due to an increase in several of the company’s operating expenses, including labor and promotions. In particular, the latter surged from US$170,000 to US$5.4 million over the same period.

This fueled rapid growth in its customer base, which led the company to double its net interest income for the period compared to the first nine months of 2023.

See also: From bricks to clicks: Superbank’s digital rise

With the high interest rates Superbank offers on its deposit products – 7.5% per year – its customer numbers are expected to continue soaring. This has been a key strategy for newly launched digital banks in Indonesia hoping to attract new deposits and users.

It is likely that the funds raised from a Superbank IPO will be used to sustain its high-interest offerings, marketing efforts, and other strategies to capture market share.

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