JAKARTA — Indonesia’s largest private tech company, Gojek, has obtained an additional $300 million in investment from state-owned mobile operator Telkomsel, both companies announced on Monday, as the “superapp” provider prepares for a historic merger.
Gojek and local e-commerce giant Tokopedia are entering the final stretch of that process, having sought investor approval in early April, and are already telling their employees of their intention to merge. A deal is expected to occur by the end of June at the latest, according to a person privy to the matter.
Such a deal, expected to be the biggest-ever merger between startups in Southeast Asia’s largest economy, would create an Indonesian tech giant that encompasses everything from ride-hailing and food delivery to digital payments and e-commerce. The business segments of food delivery and e-commerce have seen rapid growth during the coronavirus pandemic as people stay indoors.
The new funds are part of Telkomsel’s agreement with Gojek when it invested $150 million in November. That came with an option to inject more money later.
Telkomsel is a joint venture between state-owned telco giant Telkom Indonesia and Singapore’s Singtel. Both have approved the latest investment, Gojek and Telkomsel said in a statement.
After Telkomsel’s initial investment in November, both companies have said they were working on integrating their services, including onboarding Telkomsel’s paid service letting users send promotional messages to other users into Gojek’s application for merchants.
“The additional investment will strengthen the collaboration between the two companies, enabling both of us to leverage our technological resources and expertise to bring the benefits of the digital economy to consumers, driver partners and small businesses across Indonesia,” said Andre Soelistyo, co-CEO of Gojek Group.
But beyond business collaboration, the additional investment could provide the Indonesian mobile operator with a substantial windfall. Gojek and Tokopedia are planning an eventual IPO of their merged entity and are aiming for a valuation close to the $40 billion that Gojek’s rival Grab announced when it unveiled its plans to go public via a special-purpose acquisition company last month.
Gojek and Tokopedia are in fierce competition with Singapore-based Sea, which has expanded its market share rapidly through offering aggressive promotions.
Besides Telkomsel, Gojek’s backers include Facebook, which invested in the company’s payment arm, global private equity company KKR and Indonesian conglomerate Astra International.
