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Time to make profit
The real battle for GoTo has just begun. Amid turbulent global markets and the cooling hype on Southeast Asia’s tech sector, GoTo is expected to have different strategies and show greater resilience in the bourse.
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Kevin Aluwi (left), Patrick Cao (second left), Andre Soelistyo (second right) and William Tanuwijaya at GoTo’s Listing Day Ceremony at the Indonesia Stock Exchange on April 11 in Jakarta. (GoTo/Henry)
I
ndonesia’s tech giant GoTo made a solid market debut at the Indonesia Stock Exchange (IDX) last week, with shares at one point gaining 23 percent above their initial public offering (IPO) price.
Though the market gain was slightly lower than what e-marketplace behemoth Bukalapak posted during its market debut last year, which was 25 percent, the IPO led the stock market to record a higher average in daily transactions at Rp 17.6 trillion (US$1.2 billion) and a new record in market capitalization at Rp 9,405 trillion for the rest of the week.
The company, which is an entity resulted from a merger of ride-hailing champion Gojek and e-commerce giant Tokopedia, became the fourth-largest publicly listed company on the IDX by market cap after private lender BCA, state-owned lender BRI and state-owned telecommunications firm PT Telkom Indonesia.
But the real battle for the tech giant has just begun. Amid turbulent market conditions across the globe and the cooling hype on Southeast Asia’s tech sector after the dramatic fall of Bukalapak shares, GoTo is expected to have different strategies and show greater resilience in the bourse.
It can no longer hold on to the image as the first decacorn, or a tech start-up to have been valued at more than $10 billion. Beyond the market valuation — a process mostly done privately among start-up companies, it must prove that it has a good performance and can make a profit as soon as possible. Nor can it depend on the country’s nationalism as it has employed more than 2 million drivers and more than 11 million merchants nationwide.
As a publicly listed entity, GoTo will no longer have the privileges of a start-up company and will be treated like any other company in the market.
Bukalapak has experienced this the bitter way. The price of each share, which was at Rp 850 on the day it was first traded in August, has dropped more than 50 percent. GoTo chose to begin at a lower price of Rp 338 apiece during its debut. On Monday, Bukalapak was traded at Rp 326 each while GoTo fared better at Rp 378.
Some analysts have raised concerns over GoTo's ability to deliver returns, as the tech giant was expected to continue posting net losses until 2024. The company booked a loss of Rp 7.59 trillion as of July 2021, according to its prospectus.
But others have put more faith in GoTo, as it has received strong support from the government. President Joko “Jokowi” Widodo and several ministers were present at its market debut. And unlike Chinese tech giants that have become targets of a crackdown by their own government, the Indonesian tech sector is still largely considered the darling of the country’s economy and has received much support from the government.
Indonesian start-ups may also look more promising than other tech companies in the region. Singapore’s Grab has also faced pressure to profit and tougher competition after its listing on Nasdaq through special purpose acquisition company (SPAC) in December 2021. Sea Group just exited India and France following its failure to do as well as it had in the Southeast Asian market.
This has left Indonesia as one of the key markets in which start-ups should compete and prove themselves worthy of the large investments they have reaped in the past years. And they can do this by making significant investments to expand their market base and solve digital infrastructure problems that have hampered the country. No more honeymoon phase and hype. It’s time for them to go to work.
