Path is struggling in the US and Europe, but it is flying high in Indonesia, a country with a 250 million population. It’s aiming to cement its place there after bringing a local investor on board during its latest $25 million round of funding.
Path CEO Dave Morin previously said that the service has 3 million registered users in the Southeast Asian country — that’s nearly 15 percent of its 23 million userbase worldwide — yet Indonesia accounts for half of Path’s daily user numbers (its largest single country), and one-third of its monthly traffic (which is equal to the US.)
With that context in mind, it’s somewhat understandable to see that Path’s Series C investment round was led by an Indonesian representative — Bakrie Global Group — but it seems that the match up isn’t of the made in heaven variety, and could actually be to Path’s detriment.
That’s because Bakrie Global Group is a deeply divisive organization. As Daily Social explains, it is in hot water over a failed investment scheme, its telecom company is in debt, while oil and gas company PT Lapindo Brantas — which the group is a controlling shareholder of — is widely thought to be responsible for an ecological disaster that has affected the East Java region since 2006.
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On top of that, former Chairman and prominent family member Aburizal Bakrie is a candidate for the 2014 election, which led to suggestions that the move is a political play.
All of this has got many Indonesians up in arms about the deal. (Imagine, for a second, Snapchat teaming up with Shell, for example.)
Path is a surprisingly popular smartphone app in the country — in spite of the high adoption of messaging apps in Southeast Asia, and the lack of a Path app for BlackBerry, the struggling phone maker that retains appeal in Indonesia — yet could this episode backfire on Path?
I’m sad that @path finds it fine to be affiliated with Bakrie.
— Alderina (@alderina) January 11, 2014
Whoever is running #path is making a blunder by taking in Bakrie >> pic.twitter.com/MsagIKPGhS | @sheggario
— Rene Suhardono (@ReneCC) January 11, 2014
Plenty of users have gone so far as to suggest that they may uninstall the app in protest but, with Path well-established among many circles, it remains to be seen how many will carry that through.
Certainly, the affiliation with a controversial group has at least impacted Path’s reputation in Indonesia, and it remains to be seen how that trades off against the benefits that a local partner can bring.
If half of all Indonesian Path users paid $15 for a one year subscription, Path would have had $30 million in revenue. More than enough.
— Aulia Masna (@amasna) January 11, 2014
Given its struggles in the US and elsewhere, Path certainly needs Indonesia, so it’s surprising to see it unite with a group that was guaranteed to bring negative headlines. It’s unclear whether Morin and Path were unaware of this, thought the benefits outweighed the issues, or simply needed to fill a seat on the investment table.
Image via Thinkstock
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