Gojek, Tokopedia: the story of Indonesia’s biggest merger

Indonesia’s two biggest startups, ride-hailing giant Gojek and marketplace Tokopedia, have announced they are merging to form GoTo Group, the largest technology group in Indonesia.

This merger, which has been on the cards for months, marks the largest of its kind between two Asia-based internet media and services companies, and as an entity, contributes 2% to the country’s GDP, and counts more than US$1.8bn transactions and over 100m monthly active users.

The companies are preparing for a dual listing, both in New York and Jakarta for later this year with a proposed valuation of US$18bn (Gojek is valued at US$10.5bn and Tokopedia at US$7.5bn).

Why are Gojek and Tokopedia merging?

Gojek and Tokopedia have been in talks for months, however they have worked together since 2015, with Gojek's local network of drivers helping to accelerate Tokopedia's product deliveries. 

While Tokopedia's CEO William Tanuwijaya discusses the merger and creation of GoTo Group as building a company that "creates social impact at scale, levelling the playing field for small businesses and giving consumers equal access to goods and services across the country", the reality is that the merger is very much about taking on Gojek's biggest regional rival, Singapore's super app Grab. 

In fact, the merger, which was quite a few months in the making, follows almost a year of talks between Gojek and the heavily-funded Singapore super app Grab, which claims to be the 'leading superapp for deliveries, mobility and financial services in Southeast Asia'.

For almost a year, Gojek and Grab, the region’s two largest ride-hailing companies, and both decacorns, had been negotiating a merger, with speculation of a merger reaching its height in October/November last year. It did not pan out, however.

And mid-April, Grab announced that the company intends to go public in the US in partnership with Altimeter Growth Corp. in what is expected to be the largest-ever US equity offering by a Southeast Asian company.

What GoTo will look like

The GoTo Group will house three independent subsidiaries – Gojek, Tokopedia and financial services and payments unit GoTo Financial. The latter, GoTo Financial holds a 22% stake in digital lender Bank Jago.

According to a statement by Gojek and Tokopedia execs, both companies will continue to thrive and coexist as “standalone brands within the strengthened ecosystem” with the combined entity of GoTo functioning as a “globally unique and highly complementary ecosystem”.

Gojek co-CEO Andre Soelistyo will be GoTo’s Group CEO, and will lead GoTo Financial, while Tokopedia President Patrick Cae will serve as GoTo Group President. Kevin Aluwi will continue as CEO of Gojek and William Tanuwijaya will remain CEO of Tokopedia.

GoTo Group will continue to focus on the markets where Gojek already operates, which includes Indonesia, Singapore and Vietnam, and will offer everything from e-commerce to on-demand serviCes, such as ride-hailing and food delivery, and financial services.

“The creation of GoTo Group, with its broad and fast delivery services and its deep penetration, will mean same-day e-commerce delivery moves a step closer to becoming the norm in Indonesia. GoTo will also further develop its payments and financial services offerings to provide an enhanced financial experience to consumers, drivers and merchants while also expanding to reach more underserved segments in Indonesia, where 140 million people have little or no access to the country’s financial system,” the company said.

CEO William Tanuwijaya, said that in addition to accelerating the growth of Indonesia’s digital economy, GoTo Group “will make it easier for people from all walks of life to access quality products and services, anytime and anywhere”.