The Business Times | 16 November 2021
Indonesia’s biggest tech group GoTo has raised US$1.3 billion from investors including the Abu Dhabi Investment Authority (ADIA), Google, Temasek, Tencent and Fidelity International, pushing its valuation to close to US$28 billion ahead of a planned public listing by the end of the year.
Other backers include Avanda Investment Management, Permodalan Nasional Berhad, Primavera Capital Group, SeaTown Master Fund and Ward Ferry. Further investors are expected to join the pre-initial public offering (IPO) fundraising round in the coming weeks, the company said in a statement on Thursday (Nov 11). ADIA committed US$400 million to the fundraising of the “super app”, according to previous reports.
GoTo, formed via a merger of ride hailing, food delivery and payments firm Gojek and e-commerce platform Tokopedia in May, is expecting to list in Indonesia by year end. The round comes as GoTo looks to secure backing from institutional heavyweights ahead of its IPO, which could build favour among retail investors and help the group avoid the pitfalls of its peer Bukalapak.
E-commerce platform Bukalapak, the first local unicorn to list in Indonesia, has seen its share price fall by more than 30 per cent to 740 rupiah (S$0.07) since its first-day closing price as retail investors lost confidence.
The retail army in Indonesia, now more than a million strong, accounts for 59 per cent of trading value on the local bourse, the Indonesia Stock Exchange said. Aspiring IPO candidates in Indonesia like GoTo might thus need to win the confidence and pockets of these newly-minted novice investors, who are driving much of the frenzy through trading forums and apps.
GoTo’s funding further underscores the interest from global investors in one of the fastest-growing digital economies in the world, where the value of online transactions in the region is set to surpass US$360 million by 2025, and almost tripling to US$1 trillion by the end of the decade, according to a report by Google, Temasek and Bain.
Indonesia, the home base and main driver of GoTo’s operations, accounts for about 40 per cent – or US$70 billion – of the region’s total value of online transactions.
“Consumer demand is being unlocked by growth in digital adoption that has brought many new users online. As a result, demand for our services continues to increase,” said Andre Soelistyo, chief executive of GoTo Group. Over 60 million people were driven online during the pandemic, bringing the number of online users in South-east Asia to over 440 million.
Fresh funds will be used to “invest further in its ecosystem”, in order to strengthen its position in the region and better serve customers, GoTo noted.
GoTo said it will focus on growing its customer base, expanding its suite of payments and financial services, as well as extending its transport fleet and logistics network.
Players in the space, like GoTo, are rapidly amassing firepower and aggressively expanding their suite of financial services products that seek to reach the country’s unbanked populace. The country has almost 140 million people with little or no access to the country’s formal financial system, GoTo said. “(This presents) a significant growth opportunity for the company in payments and financial services.”