Case Study
of the Potential of Indonesian Series C Technology Startup Companies Aplikasi
Supers in Becoming a Profitable Company while Maintaining Growth Company
Operational Performance
Matthew Adrian Tirtamarta1, Nugroho Purwanto2
Fakultas Ekonomi dan Bisnis
Universitas Indonesia
[email protected], [email protected]
INFO
ARTIKEL |
ABSTRACT |
Keywords: |
This research
aims to find out how the company's growth and the ability of the Aplikasi
Super company to survive without funding from investors can be fulfilled and
produce value and useful solutions for the Aplikasi Super in the future. The
analysis was carried out using the case study method which emphasizes one
case on the Aplikasi Super which will be reviewed in this study. The results
of this study indicate that the Aplikasi Super currently applies an equity
investment and stock dilution funding system. The aim of the Aplikasi Super
to develop as an independent company is realized by planning new strategies
and concepts so as to create potential that can be developed so that it
becomes a positive impact, especially for Aplikasi Super funding. From 2021-2022
the Aplikasi Super is not in a profitable condition, with an ROA of -1.15,
this means that the company's net profit is lower than zero or that the
company's losses exceed the total value of its assets, but this assessment
cannot be concluded absolutely from one just a factor, looking at it from a
Aplikasi Super perspective that must maintain growth and profitability while
making conditions more difficult to control so this can happen. The concept
or strategy developed by Aplikasi Supers in this case can be seen from the
company evaluating the gross margin, namely the difference between revenue
and production costs, as the main indicator of company profits. Super Apps
also takes steps to improve operational efficiency by using technology. |
Aplikasi
Super, Case Study, Investment, Investor. |
One
of the main objectives of developing startup businesses in Indonesia is to
provide convenience, efficiency and convenience for online purchases to
customers, which is facilitated by technological advances in Indonesia that
have entered the digital era (Lestari et al., 2020). Digital startup businesses in
Indonesia that rely on technological sophistication provide investment
destinations and new investors that make this startup business very profitable
to run (Sushandoyo et al., 2022). But this is actually a new
opportunity for investors who are strong so that they can easily use their
power to control the market (Hellmanna, 2022).
Digital
startup businesses in Indonesia that rely on technological sophistication
provide investment destinations and new investors that make this startup
business very profitable to run. But this is actually a new opportunity for
strong investors who can easily use their power to control the market (Hellmanna, 2022). Customers are attracted to the
market because of the variety of startups available to them and the resulting
price competition. According to an infographic about Indonesia's startup scene
created by tech in asia, daily social, and klip.com, the country had 2,000
companies in 2016, and it is estimated that this number will grow to 13,000 by
2020, making it the Southeast Asian country with the most businesses. home.
Startups
have been in the spotlight in recent years with much funding from venture
capital, private equity and other institutional investors. According to data
from CBINSIGHTS (2022), as of June 2022, there are more than 1,100 unicorns
with a valuation of more than $1 billion United States dollars. In Indonesia
there are several unicorns such as GOTO, Bukalapak, Ajaib, Traveloka, Blibli,
and Xendit. Nonetheless, as is well known, startups are not profitable. In
fact, according to data from review42 (2022), only 40% of startups worldwide
achieve profits and 82% of startups that fail to become profitable are caused
by cash flow problems. Even startup unicorns like GOTO and Bukalapak which have
been listed on the Indonesian stock exchange are also experiencing constant
losses (Hartono, 2022).
This
shows that these startups still rely on money from investors.(Vuong, 2022)said that several companies claimed
that the Corporate Social Performance (CSP) relationship was starting to weaken
under the influence of control over investor actions. Some investors from
venture capital also say that what is important is the speed at which a startup
grows rapidly to dominate the market without being concerned with profits.
However, we have seen so far that in the midst of the COVID-19 pandemic which
has been running for more than two years, many startups have emerged and gone
out of business (Kuckertz et al., 2020).
Because
many resources are limited due to the Covid-19 pandemic, many people are
turning to digital technology to meet their needs (Shah et al., 2020). Apart from helping producers and
consumers in Indonesia deal with Covid-19, startups make it easier for sellers
and service providers to offer their goods and services. However, when viewed
from this situation, the company should be able to move by itself without
having to wait for capital or funds invested by investors in building a better
company. As stated by (Nanda & Rhodes-Kropf, 2013)where companies that have just been
started and are too dependent on investor funds tend to go bankrupt more
easily, on the other hand startups like this should focus more on going public
so that the company will be valued higher. This is what makes the basis of this
research carried out on the Aplikasi Super, so that the objectives to be
achieved in this research related to company growth and the company's ability
to survive without funds from investors can be fulfilled and produce value and
useful solutions for the Aplikasi Super in the future.
Theory
Startups
Startups, orStartup-Up, is a
term adopted from English; "Start" is a noun that means
"start" inOxford
Advanced Learner's Dictionary,while
"Rising" means "continuously growing" inCambridge English Corpus.Therefore,start-upmay refer to a new business
or an established business that is experiencing rapid expansion (Oxford Dictionary).
According to Investopedia,startupsis a "young company just starting to
develop", sostartupsis a young company about to start its development.
According
to Husnayain (2018) A "startup" is a new business that has not
existed for a long time. The definition of a startup is an organization that
develops a product or service in the face of uncertainty and then implements a
business plan that enables rapid growth. The expression "startup" is
usually used to describe a business that provides technologically advanced
services or goods. Startups are usually young businesses that have just been
founded and are currently doing market research. Some of the digital startup
sectors in Indonesia include:
1. Financial
Technology(FinTech)
2. E-Commerce
3. On-Demand
Services
4. Online
Media/Social Media
5. Travel
6. Games
7. Education
Technology(EduTech)
8. dating
9. Agriculture
10. Healthcare
11. Software
as a Service(SaaS)
12. Advertising
Digital
Startup Funding System
In
the case of digital company financing, money is distributed in waves, each
adapted to a different phase of operation. StartupPedia Books(Uzzaman, 2015)covers the many phases of
fundraising for digital startups, some of which are:
1. Initial
Funding Round (seed round)
2. Angel
Investor Round (angel round)
3. Series
A round
4. Series
B rounds (series B rounds)
5. Advance
Rounds
Aplikasi Super
The
Aplikasi Super is an application for distributing groceries to stalls and
housing in small towns and rural areas in Indonesia. Founded in 2019 in
Surabaya, Super has a vision which is to equalize prices in small towns and
rural areas. Steven Wongsoredjo who is the Chief Executive Officer of the
Aplikasi Super said that basic food prices in small towns and rural areas are
at least 20% more expensive than basic food prices in urban areas. What's more,
according to data from Statista (2022), only about 55% of the rural population
has a cell phone. Due to a lack of mastery of technology including mobile
phones,
With
the lack of equal distribution of goods between one and another, this is a
problem or challenge faced by rural areas. This gap between rural and urban
areas is an opportunity for Super to fill in or cut the distribution chain of
basic food items in rural areas. Currently, Super has just been in East Java
and South Sulawesi. There are still many other potential areas for Super to
expand and grow its current business. So that the developments that occur in
super with the changes are able to make super grow and have stronger internal
strength, and are able to achieve various goals that have been set without any
problems with costs and bad conditions that occur.
Funding,
according(Yuesti, Anik, 2019), is the choice of where the company
will get its money and how much it will need. Having money is very important
for any business. It is possible to meet financial obligations using both
internal and external resources. Businesses usually need both short term and
long term financing to meet their financial obligations. Short-term or current
liabilities, such as accounts payable, are used to fund immediate expenses.
Long-term financing should be used when there is a need for long-term funding,
such as fulfilling funds to increase production capacity. This long-term
funding can come from issuing additional shares or taking on long-term debt
from overseas investors.
Company Profits
profitability
is 'the possibility of earning a profit (earning a profit)'. The profitability
that will be reviewed focuses more on the net profit aspect of the profit and
loss financial statements which is generally known as the profit earned after
the income or revenue received exceeds the costs or expenses. According to
Investopedia, profitability, which comes from the English word 'profitability',
is closely related to the efficiency level of a business when it is run. Not
just a benchmark regarding the profits and losses of a company (Harmono, 2011).
Related research
Ngoc Bao Vuong.
Investor sentiment, corporate social responsibility, and financial performance:
Evidence from Japanese companies. 2022.the purpose of this research is to
investigate the relationship between investor sentiment, social performance
(CSP), and financial performance (FP).Our study includes all non-financial
Japanese companies whose accounting and ESG information is accessible to the
Thomson Reuter Datastream and ASSET4 databases. Following Velte (2017), we
exclude financial sector companies as these companies have different corporate
governance regulations and capital structures. The final sample includes data
from 367 companies, with 5505 observations from 2005 to 2019. The empirical
results obtained from the panel fixed effect and regression instrumental
variables reveal a positive impact of firm-specific sentiment on future FP.
Conversely, the market sentiment effect is mixed because it positively affects
Tobin's Q but negatively affects the return on assets (ROA). The impact of CSP,
measured by environmental, social, and governance (ESG), on FP is similar to
market sentiment. In particular, we found that effective ESG performance in the
previous year, both overall performance and individual aspect performance, can
increase company value but reduce company profitability in the following year.
We claim that the CSP-FP relationship weakened under the moderating influence
of investor sentiment(Vuong, 2022).
Thomas
Hellmanna, Veikko Thiele. May the force be with you: Investor power and company
valuations. 2022 This paper examines the role of investor power in the equity
financing model through direct observation����������� These
results show how the usual effect whereby market forces reduce valuations can
be reversed in later rounds. Once they become insiders, powerful investors can
use their market power to increase, not decrease valuations. An important
determinant is whether insiders invest above or below the prorated threshold.
Although strong investors initially undervalued, companies prefer to bring them
in, in order to increase their strength in later financing rounds. This paper
generates new predictions about investor valuations and returns(Thomas Hellmanna, 2022).
Ramana
Nanda a,n , Matthew Rhodes-Kropf. Investment cycles and startup
innovation. 2013 We found that venture capital-backed startups received their
initial investment in hot market conditions were more likely to go bankrupt,
but were dependent on going public, were priced higher on the day of their
initial public offering, owned more patents, and had more citations to their
patents. . Analysis is based on data from Dow Jones Venture Source. The
Business Source data also provides more accurate information about exits,
particularly data about a company's pre-cash valuation in IPOs and
acquisitions, both of which are critical to our analysis of company results. We
focused our analysis on US-based startups, because the data for these companies
is comprehensive. The US is also a good setting for our research because the
institutionalization of the venture industry in the US implies that startups
backed by venture capital firms are likely to comprise the majority of startups
commercializing new technologies. Our sample for this analysis is a startup
whose first financing event is an early-stage investment (Seed or Series A).
from 1985 onwards. The results show that VCs are investing in riskier and more
innovative hot market startups (not just worse companies). This is especially
true for most experienced VCs. Besides that,(Nanda & Rhodes-Kropf, 2013).
This study applies the case study
model with the type of single case design, which is a case study research that
emphasizes research on only one case unit, as is the case in this study which
focuses on the case of the Aplikasi Super company that has been described. To
test hypotension or provide solutions to specific topics, by collecting data
through questionnaires and other forms of research methodology. Through case
study research with a qualitative descriptive method, the researcher will
explain what actually happened regarding the current situation being studied.
This method is used because this research focuses on the case of the Aplikasi
Super company which has been described as seeing the growth of the company with
and without assistance from investors (Sugiyono, 2017).
Research will be conducted on
Aplikasi Supers with the object of research, namely employees who work on
Aplikasi Supers that regulate and manage funding and company strategy for
Aplikasi Supers.
In this study, the types of data to
be collected are primary data and secondary data. The data in this study are
primary data, namely the results of interviews conducted with Aplikasi Super
employees, while secondary data are in the form of financial reports from
Aplikasi Supers, printed books, online books, journals, scientific papers, and
knowledge and informatics sites. .
In the technique of checking the
validity of the data, the authors use two methods, namely triagulation and
persistence of observations which focus on the specific features of the
situation that are most relevant to the problem at hand. The analysis with the
stages of data collection, data reduction, data presentation and drawing
conclusions is in accordance with the picture below.
Figure 1. Miles and
Huberman's Interaction Analysis Model
The analysis in this study is
based on the use of data obtained from interviews conducted with Aplikasi Super
employees and data from the Aplikasi Super financial reports that have been
recorded so that they are re-analyzed to obtain the objectives of this
research. For interviews, it is necessary with several parties such as
management to study management steps in taking advantage. In addition, there is
a need for in-depth interviews with suppliers to learn how to go about
providing Super at lower prices and what they need to find ways for suppliers
to provide affordable prices.
RESULTS
AND DISCUSSION
The Aplikasi Super
is an application for distributing groceries to stalls and housing in small
towns and rural areas in Indonesia. Founded in 2019 in Surabaya, Super has a
vision which is to equalize prices in small towns and rural areas. Steven
Wongsoredjo who is the Chief Executive Officer of the Aplikasi Super said that
basic food prices in small towns and rural areas are at least 20% more
expensive than basic food prices in urban areas. What's more, according to data
from Statista (2022), only about 55% of the rural population has a cell phone.
Due to a lack of mastery of technology including mobile phones,
Super App Funding
The
Aplikasi Super currently accepts funds with an equity investment system and
share dilution. This system also has risks that might occur if there is a lack
of management in managing it. Some of the risks that can occur if Super Apps
continue to use this system are:
1. Equity
investment can lead to capital shortages and reduced liquidity, this can lead
to serious capital shortages and hinder a company's ability to meet short-term
and long-term financial needs.
2. Dilution
of shares can cause dilution of share ownership of old shareholders, this can
cause old shareholders to lose control over the company and affect share prices
in the market.
3. Dependence
on one source of financing can be a risk for the company, so that the company
can experience financial difficulties and threaten its survival.
4. Too
much control or interference from investors can interfere with company
performance, this can interfere with company performance and create conflicts
with company management.
By
reviewing some of the problems that occur, the Aplikasi Super has arranged and
planned a strategy to avoid this possibility. Super Strategies wants to be
independent without relying on funding from investors or banks. Super must have
efficient operations, not too many accounts receivable, and more ability not to
depend on suppliers. Super has a vision to control the supply chain from
upstream to downstream to provide products that are more affordable than now
for rural customers. From this point of view, the company is considered to be
able to control finances independently, as well as several other benefits that
can be generated by the Aplikasi Super company if it is able to maintain
profitability along with growth.
Aplikasi
Super Growth and Profitability
In
this study the growth of Aplikasi Super companies is measured using Asset
Growth. The following is tabulation data for calculating Asset Growth for
Aplikasi Super companies in 2022.
Table 1. Asset Growth for Aplikasi Super
companies
Company
|
Asset
Growth |
Average |
|||||||||||
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
||
Aplikasi
Super |
0.04 |
0.04 |
0.03 |
0.13 |
0.01 |
0.02 |
0.02 |
0.02 |
0.02 |
0.02 |
0.02 |
0.02 |
0.036 |
From
the table it can be seen that the company is able to maintain asset values
under the same conditions until the end of 2022 at a value of
0.02 with an average of 0.036.
Profitability
is a ratio to assess the company's ability to make a profit. This ratio also
provides a measure of the effectiveness of a company's management (Kasmir,
2018). (Kasmir, 2018) to measure Profitability using the Return On Assets (ROA)
proxy. The industry average standard for return on assets is 5.98% (Lukviarman,
2016). The level of return on assets depends on the company's asset management
which illustrates how efficient the company's operations are. The higher the
return on company assets, the more efficient the company's operations and vice
versa. The following is tabulation data for calculating the Profitability value
(ROA) for Aplikasi Super companies in 2021 � 2022.
Table 2. Return On Assets of Aplikasi Super
companies
Company
|
Return
On Assets |
Average |
|
2021 |
2022 |
||
Aplikasi
Super |
-1.22 |
-1.08 |
-1.15 |
From
the table it can be seen that the profitability of the Aplikasi Supers company
is not in a favorable condition, with an ROA of -1.15, this means that the
company's net profit is lower than zero or that the company's losses exceed the
total value of its assets. This can be caused by various factors, such as
declining sales, high operating costs, or capital expenditures that don't
generate the expected returns.
Growth
and profitability have a significant impact on the company. Growth can increase
a company's competitive advantage and increase market share, which in turn can
increase revenue and profitability. However, growth can also require large
investments in people, technology, and infrastructure, which can affect a
company's liquidity and require additional capital. On the other hand,
profitability can provide financial ability for companies to invest and expand,
increase capital and reduce debt, and provide confidence to investors and
creditors. Consistent and sustainable profitability can enhance a company's
reputation and provide long-term stability. However,
Companies
must seek a balance between growth and profitability in their business strategy
(Achim, 2010). Growth that is too fast can be
detrimental to the company if it is not matched by the availability of
sufficient resources and effective management, while profitability that is too
high can indicate a lack of long-term investment and development. Companies
must pay attention to their short-term and long-term needs in determining the
right growth and profitability strategy
CONCLUSION
The conclusion of this study shows that the Aplikasi Super is currently
still implementing an equity investment funding system and stock dilution. In
line with the aim of the Aplikasi Super to develop as an independent company,
it is realized by planning new strategies and concepts so as to create
potential that can be developed so that it becomes a positive impact,
especially for Aplikasi Super funding. However, from 2021-2022 the Aplikasi
Super is not in a profitable condition, with an ROA of -1.15, this means that
the company's net profit is lower than zero or that the company's losses exceed
the total value of its assets, but this assessment cannot be absolutely
concluded from just one factor reviewing from a Aplikasi Super perspective that
must maintain growth and profitability while making conditions more difficult
to control so this could happen. The concept or strategy developed by Aplikasi
Supers in this case can be seen from the company evaluating the gross margin,
namely the difference between revenue and production costs, as the main
indicator of company profits. Super Apps also takes steps to improve
operational efficiency by using technology, expanding market reach and
optimizing employee performance, so as to reduce production costs and increase
profits. The concept or strategy developed by Aplikasi Supers in this case can
be seen from the company evaluating the gross margin, namely the difference
between revenue and production costs, as the main indicator of company profits.
Super Apps also takes steps to improve operational efficiency by using
technology, expanding market reach and optimizing employee performance, so as
to reduce production costs and increase profits. The concept or strategy
developed by Aplikasi Supers in this case can be seen from the company
evaluating the gross margin, namely the difference between revenue and
production costs, as the main indicator of company profits. Super Apps also
takes steps to improve operational efficiency by using technology, expanding
market reach and optimizing employee performance, so as to reduce production
costs and increase profits.
BIBLIOGRAPHY
Achim, M. V. (2010). Business performances:
between profitability, return and growth. Annals of the University of
Craiova, Economic Sciences Series, 2.
Hartono, H. (2022). Analysis of Start-Up
Share Valuation on the Indonesia Stock Exchange for the 2017-2022 Period Using
the DFC GMV and Tobins�q Methods. Journal La Bisecoman, 3(5),
197�211.
Kuckertz, A., Br�ndle, L., Gaudig, A.,
Hinderer, S., Reyes, C. A. M., Prochotta, A., Steinbrink, K. M., & Berger,
E. S. C. (2020). Startups in times of crisis�A rapid response to the COVID-19
pandemic. Journal of Business Venturing Insights, 13, e00169.
Lestari, D., Darma, D. C., & Muliadi,
M. (2020). Fintech and micro, small and medium enterprises development: Special
reference to Indonesia. Entrepreneurship Review, 1(1), 1�9.
Nanda, R., & Rhodes-Kropf, M. (2013).
Investment cycles and startup innovation. Journal of Financial Economics,
110(2), 403�418. https://doi.org/10.1016/j.jfineco.2013.07.001
Shah, S. G. S., Nogueras, D., Van Woerden,
H. C., & Kiparoglou, V. (2020). The COVID-19 pandemic: a pandemic of
lockdown loneliness and the role of digital technology. Journal of Medical
Internet Research, 22(11), e22287.
Sugiyono, P. D. (2017). Metode Penelitian
Bisnis: Pendekatan Kuantitatif, Kualitatif, Kombinasi, dan R&D. Penerbit
CV. Alfabeta: Bandung.
Sushandoyo, D., Kencanasari, R. A. M.,
Prasetio, E. A., & Matsuura, Y. (2022). The influences of technological
capability and market orientation toward business model innovations of digital
startups. International Journal of Innovation Management, 26(02),
2250018.
Thomas Hellmanna, V. (2022). May the force
be with you: Investor power and company valuations. Journal of Corporate
Finance Volume 72, February 2022, 102163.
Uzzaman. (2015). StartupPedia. In Yogyakarta:
Bentang Pustaka.
Vuong, N. B. (2022). Investor sentiment,
corporate social responsibility, and financial performance: Evidence from
Japanese companies. Journal Borsa _ Istanbul Review 22-5 (2022) 911�924.
Yuesti, Anik, P. K. (2019). Manajemen
keuangan jendela pengelolaan bisnis. In Bali.