Traveloka Announces New Funding Worth of 3.6 Trillion Rupiah
Vietnam and Thailand's business are getting better, while Indonesia and Malaysia still adjusting
Traveloka, today (7/28) announced the latest funding worth of US$250 million or equivalent to 3.6 trillion Rupiah. There are no further details on who participated, but EV Growth is one of the previous investors confirmed to be involved in this round. This investment is to focus on build up the company's balance sheet while strengthening several product lines amid the Covid-19 pandemic.
This funding is previously reported by several media since early July 2020. Rumor has it that some investors, including Siam Commercial Bank, FWD Group, GIC, and East Ventures, mentioned involved in the final stage of negotiations for Traveloka's follow-on funding. Reuters also says the Qatar Investment Authority (QIA) is leading the current round.
In this round, Traveloka's valuation is estimated to drop at $2.75 billion (nearly 40 trillion Rupiah). The down round action was taken due to the company's business struggle by Covid-19 and the declining traction.
"This is a major crisis in the current time, both in terms of finance and humanity. This situation is a form of re-adjustment that forces business people to rethink their plans, strategies, and business models. The travel industry is experiencing hard times that have never happened before, including Traveloka. The management team has made quite difficult efforts, including restructuring and optimization, to minimize the financial risks. We are confident that Traveloka will rise again stronger after going through this crisis," Willson Cuaca said as Managing Partner EV Growth involved in this round.
Hardships during Covid-19 pandemic
Covid-19 has brought the OTA business experience a difficult challenge. Public transportation freeze, various destinations are closed; transactions declined. For Traveloka and many other OTA players, this has been the worst condition in their history.
Traveloka's partners in the transportation, accommodation, activities, and restaurant sector also having some difficulty. In terms of transportation, consumer demand dropped dramatically while demand for refunds jumped significantly; the hotel business experienced the lowest occupancy rate ever; lifestyle partners in domestic and regional and restaurant partners must temporarily close their business operations.
"It can't be denied that Traveloka is very affected by the Covid-19 pandemic. Our business is at its lowest point since we first started. However, we always believe that Traveloka will bounce back with the rapid adjustment of business strategies, working together with industry partners and other stakeholders, and continue to deliver innovative products to users as our main focus," Traveloka's Co-founder and CEO, Ferry Unardi said.
Struggling for business sustainability
In order to sustain, Traveloka applied some steps to optimize business, make savings, and refocus to prepare strategies to welcome the new normal. In Indonesia and Vietnam, for example, Traveloka finds the domestic sector, travel or short-range entertainment activities are getting back to normal and restore business, along with the high level of public awareness of pandemics and lifestyle adjustments to the current situation.
Various initiatives were launched to answer consumers' changing demand, such as the Covid-19 Test service combined with airline tickets, booking hotel vouchers with flexible stays through "Buy Now Stay Later", the Online Xperience program featuring popular hosts, the Traveloka LIVEstyle live stream program Flash Sale, as well as the Traveloka Clean campaign that allows users to place orders through Traveloka more convenient and secure.
"I am pleased to say that from a business standpoint, we are seeing a gradual recovery in all of our main markets. The Traveloka business in Vietnam has begun to stabilize and is approaching the period before Covid-19, while our business in Thailand is now almost beyond 50% compared to normal situations. "Even though Indonesia and Malaysia are still in the early stages of recovery, both markets continue to show promising momentum with week-to-week progress, especially for the line of accommodation business with the emergence of a short-term vacation stay or staycation," Ferry added.
–Original article is in Indonesian, translated by Kristin Siagian