Indonesian online travel agency Traveloka received a $350 million minority investment from Expedia Inc in July 2017, making it arguably Southeast Asia’s first travel unicorn with a valuation of $2 billion.
In its home market, ranked as the world’s fifth largest domestic sector, the company is dominating the industry.
It is set to grow further with the digital economy enveloping the country and elsewhere in Southeast Asia.
This "land of opportunity" drew Henry Hendrawan to leave his five-year career with Boston Consulting Group to take a bet on Traveloka in 2015, joining as chief technology officer.
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In conversation with Yeoh Siew Hoon at the WIT 2017 conference, he says a key reason is the "digital wave sweeping over Indonesia".
The capability of the three founders – Albert Albert, Ferry Unardi, Derianto Kusuma – was another reason for his homecoming.
"It’s difficult to find three U.S.-trained engineers as founders of a startup. It’s a compelling team to be part of.”
Hendrawan adds that he admires the "conviction" of the founders who left successful careers in the U.S. with one-way tickets to explore the digital revolution in Indonesia and the APAC region, and to set up Traveloka in 2012.
He describes the investment from Expedia, which he was instrumental in putting together, as a "sweat deal" despite the company being a "tough negotiator".
"We have been partners since 2014. It’s not a zero-sum-game but a win-win situation. They’re happy with the terms they have and we’re happy with ours". although he will not disclose what the terms were.
The deal enables Expedia to work with platforms targeting Southeast Asian consumers as its ecosystem is weak in Indonesia, Thailand and the Philippines.
Asked if Traveloka’s ambition is for world domination, Hendrawan says the company is not looking at the world but instead its focus is on consolidation in travel in Indonesia, and growth in Southeast Asia for the next five years.
"The Southeast Asian market is large and difficult to tap, and we need to go deep. There is also massive undercutting and [there are] discounts going on.
"We have to be sensitive to the economics of the region, and we have to use different strategies depending on the situation and the markets."
The company's strategic investor is making a lot of noise in the world of private accommodation since its acquisition of HomeAway. But for Hendrawan and the Traveloka brand, it's not a big deal yet - still "looking into it", he explains.
* This article was originally published on Web In Travel.