Why Traveloka could be Indonesia’s first startup unicorn

It’s been a year of disasters for the Asian air travel industry. Nevertheless, due to its geography, Asia is the largest, fastest-growing, and most competitive market in the world for flights.

Last October, the International Airline Travel Association said that by 2034, China, India, and Indonesia will be three of the five fastest-increasing markets in terms of additional passengers per year. By that time, China will get 856 million new passengers, India will see 266 million more, and Indonesia will see an uptick of 183 million. This presents a huge opportunity for tech startups.

To date, there haven’t been any confirmed startup unicorns to come out of Indonesia. One could argue that Tokopedia may be able to make the claim, assuming that the US$100 million investment from Sequoia Capital and SoftBank was in exchange for more than 10 percent of the company. But alas, that ownership percentage pie for Indonesia’s popular consumer-to-consumer marketplace hasn’t been made public, and William Tanuwijaya says he doesn’t much care about the unicorn title.

So far, we’ve only seen companies with confirmed billion-dollar valuations coming out of Asian markets like China, India, and Japan. In Southeast Asian emerging markets like the Philippines, Thailand, and Indonesia, things have understandably moved much slower due to market immaturity.

But we may see a few mythical awakenings sooner rather than later in countries like Indonesia. One company that is arguably the most likely candidate to be given a single horn and a pair of wings is travel booking site Traveloka.

Air and web traffic control

In recent years, US-based comScore, a firm that provides marketing data and analytics to many of the world’s large enterprises, agencies, and publishers, confirmed that Traveloka is ranked as Indonesia’s number one flight search and booking service, apart from the direct airline websites. The online travel agency landscape in Indonesia is still relatively niche. However, growth is happening, as nearly 10 percent of all ticket sales were made online as recently as 2013.

The same year, the gross total travel bookings in Indonesia clocked in at US$10.5 billion, according to a Phocuswright study called Indonesia Online Travel Overview: Arrived With a Bang, Brace for the Boom. Addressing the industry outlook, Euromonitor says high growth of mobile phones and data plans also allow for the fast penetration of internet mobile transactions, which are also utilized by online booking websites like Traveloka, its closest competitor Tiket, and other contenders like PegiPegi and Wego.

Ferry Unardi, Traveloka’s co-founder and CEO, says his firm now has more than 270 employees, up from 120 last September. In March, SimilarWeb clocked Traveloka’s desktop traffic at an estimated 3.95 million visits. This is impressive, but still not as high as December’s estimation – high season for flight travel – which was around 5.45 million desktop users. In contrast, Traveloka’s closest local adversary, Tiket, only got an estimated 1.95 million desktop visits during the same month.

Back in November, Traveloka claimed that it was actually getting around 250,000 visits per day. If that number is indeed accurate, it means that Traveloka’s combined desktop and mobile traffic exceeds 7.5 million visits each month.