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Start-up raises cheap funds through IPO
Human resources management solution firm PT Telefast Indonesia made its debut on the Indonesia Stock Exchange (IDX) on Tuesday, adding to the lineup of technology start-ups tapping into cheap funds from the public
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span>Human resources management solution firm PT Telefast Indonesia made its debut on the Indonesia Stock Exchange (IDX) on Tuesday, adding to the lineup of technology start-ups tapping into cheap funds from the public.
Telefast raised close to Rp 75 billion (US$5.33 million) in fresh funds from the sale of about 25 percent of its shares during its initial public offering (IPO), which was oversubscribed by 7.4 times during its offering period earlier this month.
Telefast president director Jody Hadrian said the company would use 70 percent of the IPO proceeds as capital expenditure. About 25 percent of the proceeds will be used to develop its IT infrastructure and app system, while the remaining 5 percent will be utilized for the firm’s human resources development, he told reporters after the official listing of the company.
Telefast provides a digital HR information system through the HRKU mobile app, which manages employees’ payrolls and annual leave, and the Bilik Kerja app, a digital talent pool that acts as a matchmaker between jobseekers and prospective employees.
Jody said that besides providing digital HR solutions, the company also provided talents to businesses in the conventional way through its outsourcing subsidiary, PT Emitama Wahana Mandiri.
With its IPO, the company became the first digital HR management company to go public in Indonesia, but it was not the first local start-up to make its shares available to the public in IDX’s history.
The first local start-up to make a debut on the bourse was payment gateway provider PT Kioson Komersial Indonesia in October 2017.
Since then, five other technology start-ups have offered their shares to the public. The companies include digital payment PT M Cash Integrasi, which provides services like bill payments and mobile phone credit top-ups, and travel tech firm PT Yelooo Integra Datanet, which provides portable Wi-Fi modems to holidaymakers.
Start-ups worth more than $1 billion like ride-hailing app Gojek, online travel agent Traveloka and e-commerce platforms Tokopedia and Bukalapak remain reluctant to enter the local stock market.
Octavianus Budianto, president director of Kresna Sekuritas, which was the underwriter of the IPOs of start-up companies currently listed on the bourse, said that convincing a start-up to be publicly transparent was a challenge.
“Once they are listed, they need to maintain good corporate governance that fit the standards of a public company, and it’s not that easy for them,” he told the press in Jakarta.
He said the securities firm typically needed about one year to convince start-ups to improve their corporate governance, while teaching them to adhere to good business administration standards.
Jody acknowledged that he had been coached by Kresna Sekuritas ahead of the IPO.
“It was a long process, but we learned that we also need to have a good administration process along with maintaining our business to sustain,” the Telefast president director said.
Despite the reluctance and long preparation time for start-ups, Octavianus said that Kresna Sekuritas would continue to help start-ups to go public as he believed that digital firms were the future for companies to remain profitable.
He also said that this year, the securities firm was planning to help digital cloud advertising firm PT Digital Mediatama Maxima to go public before the end of this year.
In the meantime, Kerry Rusli, the director of Sinarmas Sekuritas, which was the underwriter for Kioson’s and Yelooo Integra’s IPOs, shared the same sentiment, saying it would help start-up firms list their shares on the IDX.
He said that there was no specific criteria of a start-up that it would represent.
“As long as we believe that the company has prospects and its business is sustainable, we will definitely help it go public,” he told The Jakarta Post via text message.
Meanwhile, Koneksi Kapital analyst Alfred Nainggolan said he also believed there was a market for start-up shares among investors.
He said the high increase in revenue and profit of start-up companies often lured investors seeking after high gains from their investment, but the high gain could have high risks. “Given such a situation, the shares of start-ups best suit the market of risk-takers,” he said.
