Gojek negotiates a merger with a fellow technology unicorn

05/01/2021 09:55 GMT + 7

According to Bloomberg, ride-hailing service Gojek is in talks to merge with PT Tokopedia, a pioneer in e-commerce in Indonesia.

Gojek driver waits outside a restaurant in Jakarta, Indonesia in 2020. (Image: Bloomberg)

The two most valuable startups in Indonesia have signed detailed agreements to conduct appraisal of each other’s businesses, the source said. Both sides see the potential for cooperation and want to close the deal early in the next few months.

The combination will create a powerful Internet company with a combined value of more than $ 18 billion. Business areas range from ride hailing, payments to online shopping, and delivery. New entity planning to IPO in US and Indonesia.

According to the source, Gojek and Tokopedia have considered merging since 2018, but negotiations only accelerated after discussions between Gojek and Grab came to a standstill. Grab CEO Anthony Tan is reportedly against the desire of major shareholder SoftBank to give up some control over the new entity after the merger with Gojek.

Southeast Asia’s two most valuable startups – worth an estimated $ 25 billion – talk about mergers after years of fierce competition in ride hailing, food delivery, and financial technology. Around December, sources of Bloomberg revealed that the two sides had made clear progress in negotiations but were at odds on how to manage Indonesia, an important market in the region. According to the source, SoftBank was out of patience with Grab and turned to support the deal between Gojek and Tokopedia. Gojek and Tokopedia share a number of investors such as Google, Temasek Holdings, Sequoia Capital.

Gojek and Tokopedia are valued at about $ 10.5 billion and $ 7.5 billion, respectively. The founders of the two companies have been friends for more than 10 years. Meanwhile, the negotiations between Grab and Gojek are more intense and have not progressed enough for the two to sign the agreement.

The company born from Gojek and Tokopedia will dominate Indonesia, one of the fastest growing Internet economies in the world. If they list on the US stock exchange, investors will have more options outside of Sea, Southeast Asia’s only major internet company with a presence here. Shares of Sea have risen by nearly 400% by 2020, in large part thanks to the growing popularity of mobile games and online shopping platforms.

Besides, the deal between Gojek and Tokopedia may not be under as much legal pressure as between Gojek and Grab. The combination between Grab and Gojek is expected to reduce competition in Southeast Asia’s ride-hailing, delivery and e-payment markets, something government officials have expressed concern about.

Companies are working on a number of different IPO options. They can choose traditional IPOs in Indonesia and the US or partner with another company to list in the US. Last month, Tokopedia said it hired Morgan Stanley and Citigroup as advisors to speed up its public offering.

Du Lam (According to Bloomberg)

The parent company Shopee makes investors look forward to the merger of Grab - Gojek

The parent company Shopee makes investors look forward to the merger of Grab – Gojek

As shares of Sea, Southeast Asia’s largest technology company, rose, Grab and Gojek’s investors just licked their lips.


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