The COVID-19 pandemic serves a lesson for companies in developing their business toward a sustainable business concept. One of the efforts of various companies is to carry out digital transformation. Digital transformation allows companies to integrate all of the company’s operational activities which can be accessed online, supporting the restrictions on community activities imposed by the government. This encourages the growth of various start-up companies with digital business models during the pandemic.
Significant funds are a problem for companies to carry digital transformation, especially during the pandemic. Companies must allocate substantial funds for capital expenditures, especially in technology. On the other hand, potential investors have also closed themselves off from investing by considering the investment risks during the pandemic. Start-up companies need to find the right funding solution to fulfill fund requirements.
One of the funding options currently available for start-ups is going for an IPO (Initial Public Offering). IPO is a a way of corporate funding in which a private company makes an initial public offering. IPOs are considered a funding solution because IPOs allow companies to obtain large amounts of funds. Companies with digital business models are one of the most attractive investment sectors for potential investors today.
Year 2021 is the beginning of the trend that digital companies choose the IPO path. This trend can be seen where 7 out of 54 companies carrying out IPOs throughout 2021 are included in the technology sector, so the number of publicly listed companies in the technology sector in 2021 is as many as 25. One of the technology companies with the most significant funding acquisition is PT Bukalapak.com Tbk (BUKA) which successfully carried out an IPO with 8.7x oversubscribed funding targets of almost to IDR 22 trillion.
BUKA opens the initial trend of IPOs for technology companies with unicorn status in Indonesia. By the end of the first semester, 21 companies had successfully carried out IPOs, including PT GoTo Gojek Tokopedia Tbk (GOTO) as the next unicorn technology company to carry out an IPO successfully. GOTO obtained funds from the public offering of approximately IDR 13.7 trillion from the proceeds of the initial public offering with a market capitalization of over IDR 400 trillion. This achievement makes GOTO becomes the 3rd largest IPO company in Asia and 5th largest in the world, with the status as an issuer with the 3rd largest market capitalization on the Indonesia Stock Exchange (IDX). The success of GOTO’s IPO motivates other companies to take steps to carry out the IPO achieving their business goals. The details of the 22 companies that have successfully carried out the IPO are as follows:
The IPO trend of digital start-ups also supports the overall trend of IPO companies. After 21 companies successfully carried out IPOs in the first half of 2022, IDX’s Director of Corporate Valuation, I Gede Nyoman Yetna, also said that 43 companies were queuing up to be listed on the stock exchange, including another digital start-up, namely; PT Global Digital Niaga, a company resulted from the merger of Blibli and Tiket.com. Suppose the entire IPO plan is successfully implemented, the number of IPOs for the current year is predicted to be 64 companies, an increase of 19% or as many as ten companies compared to the number of IPOs last year.
The execution of IPO can run smoothly through careful preparations by companies. Companies need to design a scheme for offering shares to the public and the necessary restructuring to run the system. Of course, this preparation requires a variety of supporting professionals who participate and support the success of the IPO process, including securities administration bureaus, securities underwriters, notaries, legal consultants, appraisers, public accounting firms, and financial consultants.
SW Indonesia, through SW Solution, a financial consultant also assists the companies’ preparation for the IPO. SW Solution is ready to assist companies in assessing from a macro to micro perspective, including IPO trends, industry prospects, competitor comparisons, and companies’ historical performance. In addition, SW Solution also assists companies in designing the initial restructuring scheme to describe the acquisition of funds that can be received from the IPO proceeds based on the companies’ valuations, both in terms of valuation using the income method and the comparative method.