Gojek and Tokopedia announced today (May 17) that they have combined their businesses to form the GoTo group.
Earlier this year, Bloomberg reported that Gojek was in advanced merger talks with Tokopedia, one of Indonesia’s largest e-commerce sites. The combined entity plans to list in the United States and Indonesia.
According to a press release, a press release, the agreement “marks the largest business combination in Indonesia and the largest between two Internet-based service and media companies in Asia to date.”
To put the values of companies in context, Gojek is currently valued at about US $ 10.5 billion, while Tokopedia is valued at about US $ 7.5 billion.
The group also claimed to have reached a total value of the group’s gross transactions of more than US $ 22 billion by 2020, as well as more than 1.8 billion transactions.
The combined ecosystem of Gojek and Tokopedia accounts for two percent of Indonesia’s gross domestic product. The company has the support of investors including Alibaba Group, Google, Temasek, Facebook and Paypal.
The creation of GoTo Group, with its fast and comprehensive delivery services and deep penetration, would mean that same-day e-commerce delivery is fast becoming the norm in Indonesia. GoTo will also expand its range of payments and financial services to provide an enhanced financial experience to consumers, drivers and traders, while expanding to reach less-served segments in Indonesia, where 140 million people have little or no access to the country’s financial system.
GoTo Group in a press release
Following the merger, Andre Soelistyo of Gojek will lead the combined business as CEO of the GoTo Group, and Patrick Cao of Tokopedia will chair the GoTo Group.
Both Kevin Aluwi and William Tanuwijaya will remain as CEO of Gojek and Tokopedia respectively. The two companies, however, did not mention the financial details of the merger.
Gojek, Grab merger canceled
Prior to its merger with Tokopedia, it was reported that Gojek was considering a merger with Grab. The merger was, however, convened in January this year.
Sources familiar with the matter were told The Business Times that the two largest companies in the region were unable to agree on a number of issues, including “valuation and corporate culture”.
News was also given about the possible merger public reaction in Indonesia, with Indonesian motorcycle drivers’ unions threatening to start protests for fear of major job losses.
Featured Image Credit: Mime Asia / Go Kompas