Gojek, Tokopedia Unite to Form GoTo

GoTo (Gojek and Tokopedia’s merged company) is considering a traditional listing in Indonesia, as well as going public in the US, possibly through another SPAC merger.

The merger of Gojek and Tokopedia came after months of potential merger discussions between the former and Grab were finally called off. The deal reportedly fell apart because neither could agree on the control each business would have in the combined entity, along with the looming concerns that a merger might not pass regulatory scrutiny because of their already dominant positions in the regions.Grab has moved on swiftly by preparing to list in the US through SPAC Altimeter Growth Corp. in what could possibly be the world’s biggest SPAC merger, valued at nearly $40 billion.

This Gojek, Tokopedia merger is the biggest deal in Indonesia so far and the largest between two Southeast Asia-based tech companies. Based on historical fundraising rounds for Gojek and Tokopedia, the combined valuation of both companies is around $18 billion. Gojek shareholders will own 58% of the new combined entity and Tokopedia shareholders will have the rest with Alibaba and Softbank as their major shareholder.

Together, they have amassed a combined $8.1 billion from investors across multiple rounds of fundraising based on disclose transactions alone. They have at least three investors in common: Sequoia, Google and Temasek. Other investors now include Astra International, BlackRock, Capital Group, DST, Facebook, JD.com, KKR, Northstar, Pacific Century Group, PayPal, Provident, Telkomsel, Tencent, Visa and Warburg Pincus.

Gojek’s Andre Soelistyo will lead the combined business as GoTo’s CEO, with Tokopedia’s Patrick Cao named GoTo’s president. Kevin Aluwi will continue as CEO of Gojek and William Tanuwijaya will remain CEO of Tokopedia. Soelistyo will also continue to lead GoTo Financial, the company’s payments and financial services.

Together, GoTo handled over 1.8 billion transactions with a total GTV of more than $22 billion in 2020. The newly formed group has over 2 million registered driver fleet, over 11 million merchant partners, and over 100 million monthly active users as of December last year. As part of their post-merger synergy plan, the combined entity plans to start transporting Tokopedia packages using Gojek’s bikes, paid by customers using the group’s e-wallet.

Now the company is considering both a traditional listing in Indonesia, as well as going public in the US, possibly through another SPAC merger. GoTo is likely to make its public debut in Jakarta first by the end of 2021. They are said to be seeking a valuation of $40 billion, which, given the 10% minimum free float rule in Jakarta, would record Indonesia’s largest IPO, topping PT Adaro Energy’s listing, which raised Rp12.25 trillion or (approximately $858 million) in 2008. Despite being only a fraction of Sea Ltd’s market cap and on par with Grab’s planned post-SPAC merger valuation, it’s hard not to ask – is GoTo’s target valuation ambitious or simply over-reaching?