Path, the private social network from California that enabled photo sharing and messaging service for mobile devices, said that it had finally closed a $25 million Series C round on January 11th, 2014, adding Indonesia's Bakrie Global Group as its investor.
The news of the Bakrie investment came two months after Path founder and CEO Dave Morin visited Indonesia in November 2013. Bakrie Group Global is adding itself into the list of other investors that include: Greylock Partners, Kleiner Perkins, Index Ventures, Insight Venture Partners, Redpoint Venture Partners and First Round Capital.
"We are excited to participate in Path's growth moving forward," said Bakrie CEO Anindya Bakrie, in a statement. "With solid management team and relevant development plan, Path will continue to connect more Indonesians in a personal, meaningful and productive way."
The new money brings the total investment in Path to about $65 million. Path also raised $10 million in 2011.
In an interview, Dave Morin said that he talked to many U.S. investors in the latest fundraising. But he noted that he was always looking for a strategic one in Asia, especially in Southeast Asia, where he said Path had good traction. "Our business there is stronger than people understand," he said. "I was both looking to understand that market and find a local partner to expand our operations."
Mixed to Negative Reaction
The announcement that the group controlled by presidential candidate Aburizal Bakrie had taken a stake in fast-growing tech platform Path met with a predictably mixed reaction among Indonesian social media users over the weekend. Bakrie’s companies that include mining, drilling, telecommunication and development are controversial.
The Bakrie Group has taken much criticism from many quarters in Indonesia since a gas-drilling project by subsidiary PT Lapindo Brantas ended in disaster in Sidoarjo, East Java, in 2006.
On May 26, 2006, a gas well drilled by the company blew out, resulting in the creation of the world's largest mud volcano. The flow is not expected to cease for another 25 years and, while the mud has been contained, it still continues to cover 10,000 homes within 70 hectares of area.
Studies have shown that the responsibility for the disaster was with the company, while Aburizal Bakrie, who was a government minister at the time, maintained that a nearby earthquake triggered the blowout.
Compensation claims for many affected residents became stuck in the Indonesian legal system in the years after the disaster, and many people remain angry with the way Bakrie handled the aftermath of the mud flow.
Bakrie also have company debt and tax issues. Due these and other serious allegations around its businesses, has made many people wonder why and how the company should accept such burden in such condition.
To address this issue, Anindya Bakrie, his son, said in a statement on February 3rd, 2014, that "there is no relation between the investment in Path and politics. This is pure investment." He also stated that the money does not come from debt but from internal sources. Despite the statement, many users are still complaining about this, and some even threaten to leave Path for other social network that has no "politics" in it. This critics are seen in Twitter with hashtag #NoPath4Me as one of them. There are also forums with threads open regarding this, so as commentary websites where negative concerns are addressed.
Indonesia as a Social Market
Indonesia has been one the place where Path has most of its users in Asia. With more than 4 million users carrying a third of all traffic to the social network, Indonesia is the third biggest marketplace for Path. Because Path is mobile, simple and more personal, as well as its ability to share with limited people, really attract a lot of Indonesian users.
Anindya Barkie explained that, at the current moment, Bakrie Group's business has developed to telecommunication, media and technology. (TMT). With the investment in Path, the company is positive that it can expand its reach.
"For example, TMT. Telecommunication has gone local and mobile, but not yet social. Media has gone local, but not yet mobile nor social. And for viva.co.id (part of the Bakrie Group), it's already local and mobile but not social. With this, we can create a synergy to become better," explained Anindya Barkie.
As to its growth, Morin said that Path was not ever going to be like Snapchat, the ephemeral-photo and video site. "We have been more of a turtle than a hare and we have always focused on being a better way to connect and share," Morin said.
According to him, the latest investment enables the app to continue to focus on the pursuit of the company's vision. The capital will be used to directly fuel the growth of its daily community, to continue to develop its revenue strategy, and to pursue breakthrough innovation. Path will continue to focus its efforts on attracting a world class team inspired to build this vision together.”