Kevin Aluwi and William Tanuvia recently made the history of Indonesia.
As founding members of the GoTo Group, the 30-year-olds are responsible for setting up Indonesia’s newest and most valuable technology company after merging their riding and e-commerce start-ups into the country’s largest business deal.
The combined company contributes 2% to Indonesia’s GDP through its various business lines, including a powerful super-application, according to the company. And this is just the beginning.
“We hope to one day contribute 5 to 1
But you may have never heard of it. So what exactly is GoTo and how did it get so big?
Establishment of the largest technology company in Indonesia
GoTo Group is an Indonesian technology giant created in May 2021 in a blockbuster merger between two of the largest startups in the country: Gojek and Tokopedia.
Founded during the year in the capital Jakarta, Tokopedia launched in 2009 as an e-commerce market to connect retailers with buyers, while Gojek launched in 2010 as a platform for motorcycle taxis.
Both companies were founded by a group of friends in their 20s who responded to the emerging wave of internet connectivity that swept the country at the time.
“There was some folding point where people saw the potential of the Internet there, especially with the rise of mobile devices,” said Aluwi, co-founder and CEO of Gojek.
In a sprawling country with the world’s fourth-largest population and a rapidly growing middle class, the founders are busy. In the following years, both businesses embarked on digital payments and other services.
Tokopedia has doubled the addition of new market segments such as parents and small booth owners to its ecosystem. Gojek, meanwhile, has expanded its regional mobility platform in the region and expanded its internal super application, offering consumers on-demand services from food to massages and manicures.
Then in 2015, the two began working in partnership, using Gojek drivers to ensure same-day delivery for Tokopedia products during off-peak driving hours.
“We were the first in the world to put together a partnership between an on-demand platform and an e-commerce platform,” Aluvi said.
Localized super application
Six years later, amid growing competition from regional and global technology companies, the couple formally agreed to formally merge last month in a $ 18 billion deal – the largest in Indonesia to date.
“Imagine that Amazon, DoorDash, Uber, PayPal, Stripe are combined together,” Tanuvia said. “There’s a saying that if you want to go fast, you go alone; if you want to go far, you go together. So GoTo, in principle, is to go far, go together.”
According to the new structure, Andre Soelistio of GoJek takes over as CEO of GoTo Group and GoTo Financial, Tokopedia President Patrick Kao becomes president, while Aluwi and Tanuwijaya remain CEOs of Gojek and Tokopedia, respectively.
The combined enterprise reports more than 100 million active users per month, more than 11 million traders and more than 2 million drivers in an ecosystem that accounts for 2% of Indonesia’s $ 1 trillion GDP, the company said.
GoTo hopes this will help it capture more of the market in Indonesia and beyond.
Seizing the opportunity for Southeast Asia
Indonesia’s digital economy is expected to cost $ 124 billion by 2025, as the wider online market in Southeast Asia triples to more than $ 309 billion, according to a recent study.
“Indonesia remains extremely exciting because of the population in Southeast Asia, the huge forecasts for economic growth in the next 10 years or so (and) really becoming a consumption-based economy,” said Florian Hope, a partner at Bain & Company and co-author of the study.
But to expand, Hope said the business should target its services to 120 million Indonesians living outside urban areas in more than 17,000 island archipelagos.
“Much of the early growth is due to key urban centers, Java,” he said. “The next half will be a really interesting story. How to reach them? Create logistics services there, get them on board for payments, really starting to integrate them into the digital economy.”
For GoTo, this includes the provision of payments and financial services in a country where 47 million adults do not have access to basic financial services and products, and 92 million people have never used a bank.
“It is these people who are in short supply or without banks, where illness or economic shocks can really mean the difference between being in the middle class and falling back into poverty,” Aluwi said. “So it’s both a huge business opportunity, but also an area where we really think we can make a lot of impact.”
For the purpose of IPO in 2021
To date, neither Gojek nor Tokopedia have been profitable.
GoTo is said to be planning another round of fundraising before a public listing, possibly in Jakarta and the United States. The company now boasts an impressive list of investors such as Softbank, Alibaba, Tencent, Facebook and Google.
“In the time frame, not only for the IPO, but for the whole product development, my deadline is always yesterday,” Tanuvia said. “But to be realistic about the team and so on, then it’s as soon as possible. We hope we can strive to make a list until hopefully by the end of this year.”
In April, the competing super app Grab completed Nasdaq’s list through the world’s largest blank merger, a special-purpose acquisition worth nearly $ 40 billion. GoTo is said to be looking for a public market valuation target of $ 35 billion to $ 40 billion.
GoTo and Grab’s IPOs will also serve as a litmus test for the region. If successful, this could pave the way for more technology start-ups with an increase in investor appetite.
“Historically, Southeast Asia has had a slightly greater challenge to get on the radar to China and India,” Hope said. “The last few years have shown that now the digital economy is actually competing with at least India. But the potential is clearly there and I think international investors have woken up to it.”
Preparing for global development
With their new combined resources and business thriving in the new landscape, the company is now planning its expansion strategy, including an ambitious commitment to sustainability.
“GoTo comes with great responsibility,” Tanuvia said. “We’re trying to offer solutions to a problem we figured out a decade ago. But that solution will create another problem; with millions of drivers, feeds, so many retailers, packaging, etc.”
“So we have a commitment by 2030 (yes) to really manage zero waste, zero emissions and become a company that can be a legacy for the next generation.”
Bold ambitions suggest that the GoTo of 2030 may look very different from today’s. But as for the leaders, they are just beginning.
“There is no doubt that our ambitions are global,” Aluvi said. “We have operations not only in Indonesia and we believe that the future of our combined group is one that goes beyond just one country.”
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