For the last five years, IPOs in Southeast Asia have been fluctuating, hitting their lowest in 2020 as COVID-19 started to surge. However, 2021 has indicated the improvement of the condition of the capital market in SE Asia.
First, there is a substantial increase in IPOs from 114 to 152 (by 33%). This is a strong indicator of the capital market improvement as the IPOs from 2019 to 2020 were steep (161 to 114).
Second, the amount of money was raised to a total of US$13 billion, which is the highest fund raised in the last five years. Third, the market cap has also increased from 29 to 52 (75%). Overall, the capital markets in SE Asia are heading in a better direction in 2022.
But before these massive numbers, the GoTo Group started with the collaboration of two of the biggest Indonesian startups: e-commerce platform Tokopedia and ride-sharing Gojek.
Tokopedia and Gojek: how the collaboration started
Gojek and Tokopedia started their first collaboration in 2015.
Their first collaboration was to accelerate e-commerce deliveries using a local network of drivers. This is not the first time Gojek has established this kind of partnership, as they previously partnered with other e-commerces in Indonesia.
However, the collaboration between Gojek and Tokopedia is special because both are owned by local founders. With years of experience in their respective industries beforehand, they complemented each other to grow even more.
The potential for a merger started to arise at the end of 2020 when Gojek discussed merging with another ride-hailing startup, Grab. As the deal did not come through, Gojek and Tokpedia began to discuss the idea of merging together. This discussion took place in early 2021, when Tokopedia was also preparing to participate in a public listing. Both companies finally sealed the deal and announced their merger on May 17th, 2021.
The Merge of the Two Biggest Start-ups in Indonesia
One of the most anticipated IPOs that has been released this year is the merger of two prominent unicorns from Indonesia: GoJek and Tokopedia.
The two companies merged and became GoTo at the end of May 2021. GoTo planned to dual list in Jakarta and New York as the biggest emerging company in Southeast Asia.
As of November 2021, the company had gained USD1.3 billion on its pre-IPO funding. This IPO placed third as the largest IPO in Asia and fifth on a global scale.
This merger of these two entities plays a big part in increasing Indonesia’s digital economy by integrating ride-hailing, e-commerce, and financial services. As of 2020, Gojek and Tokopedia have over 2.5 million registered drivers and over 14 million merchant partnerships, creating an ecosystem of itself that takes up to 2% of Indonesia’s GDP.
GoTo levels the field for drivers and small-to-medium businesses to grow significantly and gives customers the accessibility and flexibility to acquire products and services. In addition, GoTo facilitates the drivers and merchants’ participation in the IPO through their Gotong Royong Share Program.
Gojek’s Journey in Modernising Motorcycle Taxi
Gojek is an on-demand service company that initially focused on ride-hailing but later expanded into other services, such as e-wallet, food delivery, grocery, and entertainment. Founded in 2010, the company nurtured its humble beginnings as a call centre that enabled people to order motorcycle taxis (Indonesian: ojek) by phone with only a fleet of 20 ojek.
The intention was for ojek to find passengers easily and vice versa. By standardising the price and providing real-time information to the passengers, Gojek imposes more competitive pricing and attracts more customers than conventional ojek. Inspired by ride-hailing apps like Grab and Uber, Gojek officially launched as an app in 2015. This makes Gojek the first ride-hailing app for motorcycle taxis.
As of now, Gojek operates across several countries, including Singapore, Thailand, Vietnam, and the Philippines.
Tokopedia: Democratising the Digital Economy of Indonesia
On the other hand, Tokopedia was launched far back in 2009. With approximately 17.000 islands in the nation, Tokopedia’s mission is to democratise commerce across the archipelago of Indonesia by connecting people and businesses through technology.
Back then, most online commerce was moderated through blogs and social networking sites. However, with this system, business owners could not monitor orders, provide product catalogs, or ensure the security of the online payment system. Aware of these problems, Tokopedia took this opportunity to innovate on an e-commerce platform in Indonesia. The platform enables business owners to curate their products, track their orders, and ensure payment to the business when customers have received the products.
In hindsight, the key to Tokopedia’s success is its collaboration with MSMEs in Indonesia and continuous innovation in improving the e-commerce experience for both businesses and customers.
Main photo: By Dadbod1234 - Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=83248826
