Ride-hailing giant Gojek and marketplace Tokopedia, Indonesia’s two most prominent startups, said on Monday they have combined their businesses to form GoTo Group, the largest technology group in the Southeast Asian nation, the fourth most populous country that is currently navigating to contain the economic fallout from the coronavirus pandemic.
GoTo will be preparing for a dual listing — in New York and Jakarta — later this year, executives said. Gojek’s Andre Soelistyo will lead the combined business as GoTo Group CEO, with Tokopedia’s Patrick Cao serving as GoTo Group President. Kevin Aluwi will continue as CEO of Gojek, and William Tanuwijaya will remain CEO of Tokopedia, the two firms said in a joint announcement.
The combined entity is “a globally unique and highly complementary ecosystem,” the two firms said as they look to better compete with heavily funded super app Grab and e-commerce platform Shopee. GoTo executives claimed that the combined entity features:
- Total Group Gross Transaction Value (GTV) of over $22 billion in 2020
- Over 1.8 billion transactions in 2020
- Entire registered driver fleet of over two million as of December 2020
- Over 11 million merchant partners as of December 2020
- Over 100 million monthly active users (MAU)
- An ecosystem that encompasses 2% of Indonesia’s GDP
The deal has been in the works for several months, comes after Gojek spent several quarters exploring a merger with Grab. Tokopedia, meanwhile, was in talks late last year to pursue a public listing this year. Gojek and Tokopedia began talking earlier this year and moved to seek approval from their respective investors the previous month. During their talks, the proposed valuation of GoTo was $18 billion.
The companies, which have together raised about $8.2 billion over the years (according to research firm Tracxn), didn’t comment on the final valuation Monday, nor did they disclose any other financial terms of the deal.
The friendship of Gojek and Tokopedia founders may have helped close this deal. The two companies first began working together in 2015 to accelerate e-commerce deliveries using Gojek’s local network of drivers.
“The companies will continue to thrive and coexist as stand-alone brands within the strengthened ecosystem,” they said on Monday.
In the meantime, Grab has since announced plans to go public in the U.S. via SPAC and is seeking a valuation of $40 billion, which would be the biggest-ever deal of its kind if materialized at the current terms.
“Today is a truly historic day as we mark the beginning of GoTo and the next phase of growth for Gojek, Tokopedia, and GoTo Financial. Gojek drivers will deliver even more Tokopedia packages, merchant partners of all sizes will benefit from strengthened business solutions, and we will use our combined scale to increase financial inclusion in an emerging region with untapped growth potential. GoTo Group will continue to reduce frictions and provide best-in-class delivery of goods and services for the consumer. This is the next step of an exciting journey, and I am humbled and proud to lead the GoTo movement,” said Andre Soelistyo, CEO of GoTo Group, in a statement.
Existing investors — including Alibaba Group, Astra International, BlackRock, Capital Group, DST, Facebook and PayPal, Google, JD.com, KKR, Northstar, Pacific Century Group, Provident, Sequoia Capital India, SoftBank Vision Fund 1, Telkomsel, Temasek, Tencent, Visa, and Warburg Pincus — backed the merger, the two firms said.
Tokopedia’s Co-founder and CEO William Tanuwijaya said, “The establishment of GoTo Group proves that you can believe in an ‘Indonesian dream’ and make it a reality. Our goal has always been to build a company that creates social impact at scale, leveling the playing field for small businesses and giving consumers equal access to goods and services across the country. In addition to accelerating the growth of Indonesia’s digital economy, GoTo Group will make it easier for people from all walks of life to access quality products and services anytime and anywhere. We still have a long way to go achieve our goals, but today is about starting that journey together.