The company is set to publicly offer 130 million shares at a price between Rp 250 and Rp 375 each, as well as 78 million six-month-expiration warrants that will be given pro bono at a rate of three warrants for every five shares purchased.

Passpod is now 69.5 percent owned by IT company PT Agung Inova Teknologi Indonesia and 30.5 percent owned by PT Prima Jaringan Distribusi.

The company, established in 2016, operates as a provider of portable modems called Passpods WiFi in over 70 countries.

The products are used to overcome the lack of cost-effective connectivity available for Indonesians, particularly those traveling abroad and relying on the internet, such as for social media, app-based ride-hailing services and online shopping.

Recent data shows at least 10.6 million Indonesians will likely travel abroad in 2021, out of which 8.9 million will feel the need to stay connected. Passpod aims to net 2 million customers by 2021.

Passpod president director Hiro Wardhana told reporters during a public expose in Jakarta on Wednesday that his company would use 68.10 percent of the IPO funds for business development, 3.69 percent for research and development and 28.21 percent for the procurement of more modems and power banks.

The company says in a statement that the business development refers to creating a new billing management system and a Subscriber Identity Module (SIM) bank, which are respectively necessary for more efficient financial transactions and for the maintenance of international connectivity.

Research and development refers to the diversification of the company’s services in selling tourist-attraction tickets at competitive prices and offering a manual itinerary planning function within its Passpod app.

Hiro explained that the company planned to further diversify these services by, for instance, automating the manual itinerary planning function, selling travel insurance and allowing online souvenir shopping.

The funds from the warrants, meanwhile, would be used to expand regional operations, namely inside the country, to major outbound travel cities such as Makassar in South Sulawesi, Denpasar in Bali and Banjarmasin in South Kalimantan, and six promising Asian countries: Hong Kong, Malaysia, Myanmar, the Philippines, Singapore and Vietnam.

The statement says Passpod is optimistic about its future after having experienced 700 percent growth since 2016, serving a total of 58,600 customers as of June and earning Rp 475 million in profit in January-April.

Passpod dominates the modem rental market at 50 to 60 percent penetration, beating competitors such as Java Mifi and Wi2Fly.

“As we ran out of modems when demand surged ahead of December [the peak outbound traveling season], we stopped advertising in November,” said Hiro, explaining the market condition last year.

Passpod’s incoming minority owner PT Digital Indonesia Raya, a Jakarta-based startup incubator known as Digitaraya, also expressed confidence over the potential growth of the company.

Digitaraya has booked 20 million shares worth between Rp 5 billion and Rp 7.5 billion depending on the final fixed share price.

After the share acquisition, Digitaraya will control 5.26 percent of Passpod, while the public, through the IPO, will control 34.21 percent.

“We see the strategic potential between Passpod and Digitaraya, especially as we focus on travel and tourism startups,” said Nicole Yap, Digitaraya strategy and business development vice president.

Nicole said Passpod also planned to open a research and development lab at Digitaraya’s office, which she hoped would help train and inspire other startups. (nor)

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