Jack Ma’s Alibaba has led a US$1.1 billion investment in Indonesia’s Tokopedia, further accelerating the Chinese giant’s expansion into Southeast Asia.
Alibaba now holds a minor stake in Tokopedia, the latter made the announcement during an event to commemorate its 8th anniversary. Some unnamed existing shareholders also joined the round.
Founded by William Tanuwijaya and Leontinus Alpha Edison in 2009, Tokopedia has been dubbed Indonesia’s Taobao – Alibaba’s consumer-to-consumer marketplace. It lets sellers and buyers connect directly through its platform, with Bukalapak as its closest competitor in the archipelago.
The company raised US$100 million from SoftBank and Sequoia in 2014. Beenos, East Ventures, and CyberAgent Ventures are among its early backers.
It says the partnership with Alibaba will enhance its scale and quality of service, and facilitate its expansion.
“One of Tokopedia’s major cultures is to have the sincerity to share as a teacher and the curiosity to learn as a student. We always assume that Alibaba is our teacher and role model,” Tanuwijaya said.
On the sidelines of their event, Tanuwijaya said he hopes the announcement puts an end to rumors about Tokopedia’s acquisition. While there were offers, he stressed “we never think to build a business to sell it.”
Tokopedia’s birthday present
This marks Alibaba’s first direct investment in an Indonesian startup, though it’s no stranger to the country.
Its payments affiliate, Ant Financial, earlier established a joint venture with Indonesian media firm Emtek to launch a mobile payments and financial services product for Blackberry Messenger, which is operated by Emtek. Emtek happens to own a significant stake in Bukalapak.
Alibaba is also present in Indonesia through its browser and news aggregation business, UC Web, and plans to open a data center in the country via its cloud computing arm next year.
In Southeast Asia, Alibaba has taken over Lazada, investing another US$1 billion in the Singapore-based ecommerce company to boost its stake to 83 percent. Lazada is a leader in the six markets it operates in across the region.
The investment in Tokopedia gives Alibaba a foothold in Indonesia’s ecommerce landscape and is expected to turn Tokopedia and Lazada into allies.