Indonesia’s ride-hailing and payments giant Gojek agreed to combine with e-commerce pioneer PT Tokopedia to create the largest Internet company in the world’s fourth most-populous nation.
The combined entity is set to form an Indonesian powerhouse, encompassing businesses from car-sharing and fintech to online shopping and delivery. The two companies said Monday they will form a holding company called GoTo through a deal backed by shareholders including Google and Alibaba Group Holding Ltd.
The companies are betting a larger size will help them better compete against rivals such as Sea Ltd. And Grab Holdings Inc. As so-called super apps gain popularity in Southeast Asia, a region of more than 650 million people. The companies together were valued at about $18 billion during their merger talks, with Gojek shareholders set to receive 58% of the new entity’s ownership and Tokopedia holders the rest, people familiar with the matter have said.
Longer term, the combined entity may seek to go public. The two companies are said to have discussed a variety of scenarios with a goal of ultimately listing in both Jakarta and the U.S. The target valuation in the public markets is between $35 billion and $40 billion, Bloomberg News has reported.
Gojek co-Chief Executive Officer Andre Soelistyo, 37, will head the combined app giant. Patrick Cao, president of Tokopedia, will retain that title at the new entity. William Tanuwijaya, CEO of Tokopedia, will continue to lead the online shopping pioneer he founded in 2009, while Gojek co-CEO Kevin Aluwi will continue to helm ride-hailing and delivery giant Gojek. Group CEO Soelistyo will head the payments and financial services unit GoTo Financial.
Gojek and Tokopedia have been in discussions for a possible merger since late December after Gojek’s negotiations with rival Grab collapsed. Grab last month agreed to go public in the U.S. Through a combination with Altimeter Growth Corp., the largest-ever merger with a blank-check company.
“Today is a truly historic day as we mark the beginning of GoTo and the next phase of growth for Gojek, Tokopedia and GoTo Financial,” Soelistyo said in a statement. “Gojek drivers will deliver even more Tokopedia packages, merchant partners of all sizes will benefit from strengthened business solutions and we will use our combined scale to increase financial inclusion in an emerging region with untapped growth potential.”
Gojek was started as a call center in 2010 by Nadiem Makarim to arrange courier deliveries in Jakarta. Everything was manual: employees called motorbike drivers one by one until someone accepted an order. Makarim worked at other startups so he could keep the fledgling operation alive.
Soelistyo was working at private-equity firm Northstar Group, which became the first institutional investor in the upstart in its early days.
With backing from Northstar, Makarim decided in 2014 to develop a mobile app. When that debuted in early 2015, the service was so popular Gojek couldn’t cope with demand. Soelistyo joined Gojek as president that year and has helped to expand it to about 20 consumer services.
He was named co-CEO together with Aluwi in October 2019 when Makarim accepted a minister’s post in Indonesia’s government and resigned from Gojek.