THE BIG STORY

Org Chart: The people helming Sea Group

Image credit: Timmy Loen

We look at the captains leading Sea Group as the firm makes major moves in digital banking and in markets like Latin America and Europe.

THE HOT TAKE

What’s behind the resignation of Bukalapak's CEO?

Former Bukalapak CEO Muhammad Rachmat Kaimuddin (fourth from left) / Photo credit: Bukalapak

Here’s what happened:

Muhammad Rachmat Kaimuddin, the CEO of recently listed Indonesian ecommerce major Bukalapak, submitted his resignation letter to the firm on December 28.

He immediately joined the Indonesian Coordinating Ministry for Maritime and Investment Affairs as a special advisor.

Bukalapak has nominated its chief operating officer, Willix Halim, to become the company’s new CEO.

Here’s our take:

“My long-term goal was to join an organization that can make an impact on society by doing good, and I really like what these guys [Bukalapak] are doing.”

“My vision is to build a strong foundation for Bukalapak so it can become a ‘phoenix,’ a company that can last for 100 years or longer.”

Those are statements from Kaimuddin when he was appointed as the chief executive of Bukalapak in late 2019, replacing the company's founder Achmad Zaky. On top of that, he also pledged to make the company IPO-ready, a feat he was able to accomplish.


Bukalapak headquarters in Jakarta / Photo credit: Bukalapak

Kaimuddin's two-year stint as Bukalapak's CEO was fairly short. Median CEO tenure globally is around five years, according to PwC. His resignation took place only months after Bukalapak went public as well.

Similar to other tech companies, Bukalapak implemented a dual-class share structure in the beginning. However, as the company set to go public early last year, it abolished the classification and converted its stock to common shares.

The Indonesian Financial Services Authority (OJK) didn't allow a company with multiple voting shares to go public until late last year, after Bukalapak launched its IPO.

This means Kaimuddin's 0.1% share in Bukalapak only gives him a small influence over the company. Halim, the newly nominated CEO, has the highest number of shares in Bukalapak compared to the company's other C-level executives, but he still doesn't make the top five shareholders overall.



Many tech companies in Indonesia, such as Gojek, Tokopedia, and Traveloka, have raised several funding rounds that have diluted their founders’ shares. Without voting shares, a founder or CEO would be more easily removed if his or her leadership is questioned by other shareholders.
 

Stability in question?

Bukalapak's share price plunged 6% to 424 rupiah (around US$0.03) per share after the news of Kaimuddin's resignation was released. But it surged back to 500 rupiah on January 4 after the company announced its investment in Allo Bank's right issue process.

In Q3 2021, Bukalapak reported US$33.8 million in revenue - a 58% jump compared to the same period in the previous year - following an acceleration in its online-to-offline business, Mitra Bukalapak. The company’s operating loss for the nine months of 2021 also narrowed by 13% to US$84.9 million.

See also: Bukalapak’s financial performance in 8 charts

Bukalapak’s cash position grew from US$191 million in Q2 2021 to 23 trillion rupiah (around US$1.6 billion) at the end of the quarter, following the firm’s public listing.

If the funds are used effectively, the company can pursue other business lines. Since its IPO, the firm has expanded to or invested in the blockchain, digital bank, and bookkeeping sectors.

Despite its management reshuffle, the company’s share price will be safe as long as Bukalapak can continue to perform. That's why its next financial report will be crucial.

-- Aditya (Jakarta, Indonesia)

NEWS YOU SHOULD KNOW

Check out Tech in Asia’s coverage of Asia’s ecommerce scene here.
 

1️⃣ Sea Group plans to increase the voting rights of CEO Forrest Li and reduce that of investor Tencent. Its ecommerce arm Shopee is aggressively expanding across the globe, including a hiring spree in South Korea. Meanwhile, Tencent plans to sell US$3 billion worth of shares in Sea Group.
 

2️⃣ ShopUp, which primarily serves Bangladesh’s small merchants, has raised another US$34 million after pulling off South Asia’s largest series B round in September. Check out our previous deep dive on the company here.
 

3️⃣ China’s livestreaming sector is under intense scrutiny after the government last month imposed a staggering US$210 million fine on a top influencer.
 

4️⃣ India business-to-business firm Udaan has closed another US$250 million in funding via convertible notes and debt. The company might go for an IPO in the next 18 months.

FYI

1️⃣ RedMart’s revenue revives after year of stagnation

The pandemic has boosted the revenue of Lazada’s grocery delivery arm RedMart by nearly 50%, with revenues reaching US$307 million in the financial year ended (FYE) March 2021. The company had been integrating into the Lazada app in Singapore since the start of 2019. Will this rise be enough for RedMart to reach net profits soon?

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