A C$21.7-billion tech giant is born . . .
Indonesia’s tech leaders Gojek and Tokopedia have formally announced their merger, establishing the newly formed GoTo Group. Already unicorns (privately held startups valued over US$1 billion) in their own right, Gojek’s services include ride-hailing and mobile payments, while Tokopedia operates a popular e-commerce platform. Combined, GoTo counts Google, Temasek, Softbank, Tencent, and Alibaba among its backers. The new C$21.7-billion tech giant will be the largest startup in Southeast Asia and will target a long-awaited initial public offering (IPO) in the U.S. later this year.
Titans clashing in a red-hot market . . .
The merger will solidify Gojek’s and Tokopedia’s position in fiercely competitive Southeast Asian digital economies and create an Indonesian united front against their Singaporean rivals: Grab and SEA Limited (SEA). Grab has been butting heads with Gojek in the ride-hailing and e-wallet market for years. More recently, SEA, valued at C$144 billion, has emerged as Southeast Asia’s biggest public internet company with an integrated platform spanning gaming, financial technology, and e-commerce. SEA’s e-commerce platform, Shopee, is Indonesia’s most popular, clocking 90 million monthly visits compared to Tokopedia’s 80 million. ShopeePay also outperforms Indonesian e-wallet competitors based on user penetration rates, at 68 per cent compared to Gojek’s GoPay at 54 per cent.
A C$372 billion market by 2025 . . .
Southeast Asia’s digital market is projected to triple in size between 2020 and 2025 to reach C$372 billion. GoTo is expected to play a larger role within this rapidly growing market, where demand for online shopping, mobile payments, and food delivery has skyrocketed amid pandemic-induced social distancing, movement restrictions, and lockdowns. Further, GoTo is now expected to seek more aggressive expansion outside Indonesia, aiming to play a greater role as an investor for Southeast Asia’s burgeoning tech ecosystems with funding from the planned IPO. The response from its Singaporean rivals is expected to further shake up the tech landscape in the region. Canadian investors and tech players should take note as they seek to strengthen their economic engagement with Southeast Asia and its digital market.