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Gojek and Tokopedia, Indonesia’s two largest emerging companies, have agreed on a merger that will create a $ 18 billion food delivery group, public transportation and e-commerce with scope in Southeast Asia.
The merged company, which will be renamed GoTo, will begin preparing a public list in Indonesia and potentially in the United States this year, people familiar with the plans told the Financial Times. It will be said at a public market valuation of up to $ 40 billion, people said.
The deal will create the largest private technology start-up in Southeast Asia and give the group additional firepower against well-funded regional rivals, including “Super application” Grab and e-commerce platform Shopee, with the support of the Japanese SoftBank and the Chinese Tencent, respectively.
SoftBank and Tencent will also benefit from the GoTo merger, as respective investors in Tokopedia and Gojek. Other investors who have supported the deal are Alibaba, Facebook, Visa and Google.
News of the merger provided further evidence of how the rapidly growing technology industry in Southeast Asia is coming of age. Investors have been drawn to the region, in part because it has been less affected by tensions between the US and China. Stranger investment in India, especially from China, has also run into obstacles.
The announcement of the merger came weeks after Singapore-based Grab, which offers delivery, transportation and financial services, announced a record merger with a blank check vehicle. The deal valued Grab at $ 40 billion and will appear on the Nasdaq this year.
Shares in the United States listed by Sea Group, the parent company Shopee and the gaming group Garena, emerged 395 percent last year.
Although Gojek has operations in several Southeast Asian countries, GoTo will have its strongest presence in Indonesia, the largest economy in Southeast Asia and the fourth most populous country in the world. The merged entity has more than 100 million monthly active users on its platforms and a total gross group transaction value of more than $ 22 billion by 2020.
Gojek co-executive Andre Soelistyo will lead the combined business with Patrick Cao of Tokopedia as president. Gojek’s other co-executive, Kevin Aluwi, will continue to be the head of this business and William Tanuwijaya will continue to be Tokopedia’s chief executive.
Soelistyo will also lead the financial services business GoTo Financial.
“We have high-volume and Gojek high-frequency mobility transactions, combined with Tokopedia’s high- and medium-frequency e-commerce transactions,” Cao said. “GoTo will account for more than 2% of gross domestic product in Indonesia and we will create many more employment opportunities and income gains as our business and economy expand.”
Sea, Grab and GoTo are likely to continue to burn cash to compete in Southeast Asia, as the three companies increasingly focus on providing financial services to the region’s low-bank population.
Investors said the strength of GoTo will be its reach in several sectors.
“There is no modern internet company, anywhere in the world, that has knowledge, that has such a deep ownership of so many categories at once,” said Shailendra Singh, CEO of Sequoia Capital India, who has invested in both companies.
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