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Gojek-Tokopedia merger to boost RI's place in regional digital economy
The two companies have been facing tight competition from Shopee and Grab but the recent merger, alongside reported plans of an IPO, is expected to boost GoTo's presence in the Southeast Asian digital economy.
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In the business sense, a unicorn is any privately held start-up valued at over US$1 billion. The choice of the mythical animal alludes to the rarity of such start-ups. (Shutterstock.com/fatmawati achmad zaenuri)
T
he recent merger between Gojek and Tokopedia is expected to consolidate their positions as major players in Southeast Asia’s digital economy amid rising competition, particularly from Singapore-based companies, that led the two to lose ground in recent years, even in their home turf of Indonesia.
Jakarta-based ride-hailing company Gojek and e-commerce platform Tokopedia, both of which are unicorns, announced their merger on Monday with the establishment of GoTo Group, the country’s biggest start-up in terms of valuation at an estimated US$18 billion.
The merger enables GoTo to better compete with the likes of Singapore-based ride-hailing giant Grab, worth an estimated $14.3 billion, and Singapore’s SEA Limited, the publicly listed parent company for e-marketplace Shopee, which is worth $112.59 billion by market cap.
Furthermore, GoTo is reportedly planning to conduct an initial public offering (IPO). A listing of the combined businesses could raise as much as $2 billion, two sources told Reuters, in what would be one of the biggest IPOs ever by an Indonesian company.
“The vision is for GoTo to be as big an entity as SEA Group,” Institute for Development of Economics and Finance (Indef) economist Nailul Huda told The Jakarta Post in a phone call on Monday.
Read also: Gojek in talks with Tokopedia for $18b merger: Bloomberg News
Competition is tightening in Southeast Asia, a digital economy expected to grow threefold over a five-year period to $309 billion by 2025, according to the “e-Conomy SEA 2020” report by Google, Temasek and Bain & Co.
