Gojek driver delivering Tokopedia package to signify merger
A Gojek driver delivers a Tokopedia package. Image credit: Tokopedia

Southeast Asian food e-commerce giants Gojek & Tokopedia confirm $18bn merger

May 18, 2021

‘Super app’ Gojek and e-commerce platform Tokopedia have confirmed in a joint announcement that they will merge into a new entity called GoTo. With an estimated combined valuation of $18 billion, the deal is set to be Indonesia’s biggest M&A transaction to date.

Gojek launched in 2010 as a motorbike-hailing platform, before branching out into restaurant delivery, digital payments, and a host of other on-demand services, including e-grocery (just last week, Gojek acquired a 4.76% stake in Indonesian hypermarket operator Matahari Putra Prima.)

Tokopedia was established as an e-commerce marketplace in 2009, with myriad offerings including online grocery and Mitra Tokopedia – an ‘online-to-offline’ network designed to help Southeast Asia’s ubiquitous ‘mom and pop’ stores digitalize their businesses and order stock from farmers and other suppliers.

The Jakarta-based duo said they had a combined gross transaction value of $22 billion across 1.8 billion discrete transactions last year, with about 2 million drivers and 11 million merchants registered as “partners” on their platforms.

Last year, Gojek was reported to be locked in merger negotiations with Singapore-based archrival Grab. The two ‘super apps’ compete in the food delivery category in Indonesia as well as in Thailand and Vietnam.

However, those talks appeared to have reached an impasse by the start of this year, with a merger involving Gojek and compatriot Tokopedia widely rumored as being the more likely scenario.

Last month Grab announced it had agreed to merge with Nasdaq-listed special purpose acquisition company (SPAC) Altimeter Growth Corp. With a reported post-money valuation of almost $40 billion, that transaction is set to be the largest SPAC deal to date.

Grab has raised a total of $12.1 billion in venture funding according to Crunchbase, counting SoftBank, Alibaba, Microsoft, Toyota, Goldman Sachs, and Uber — whose Southeast Asian business it acquired in 2018 — among its investors.

Gojek has secured plenty of big-name backers too, having raised $5.3 billion in total by Crunchbase’s count from the likes of Google, Facebook, Tencent, KKR, Temasek, and Chinese food delivery and on-demand giant Meituan.

Both apps claim to be the Southeast Asia market leader in food delivery by differing metrics.

In 2019, Gojek said that its food delivery business, GoFood, generated $2 billion in gross transactions volume for the year, making it the company’s second largest business unit after payments and financial services. It also claimed that GoFood held 75% market share in Indonesia, while Grab claimed its GrabFood unit held almost 50% market share in the country.

As part of its SPAC deal announcement last month, Grab said it was Southeast Asia’s number one food delivery platform by number of deliveries. This segment of its business — including restaurant takeout orders and online grocery shopping — achieved a gross merchandise volume (GMV) of $5.5 billion for 2020, with its adjusted net revenue accounting for 15% of the Grab’s overall GMV.

A June 2020 survey by Rakuten Insight found that GoFood just edged Grab’s GrabFood in popularity among Indonesian consumers.

Post-merger GoTo and Grab will also be competing against Singapore-based, New York Stock Exchange-listed Sea Group, which offers e-commerce and food delivery services across Southeast Asia under its Shopee brand.

GoTo said it plans to pursue a traditional IPO by the end of 2021, aiming for dual listings in the US and Indonesia.


Comment? News tip? Story idea? Email me at jack@agfunder.com or find me on LinkedIn and Twitter

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