Gojek and Tokopedia announced today (May 17th) that they have merged their businesses to form the GoTo Group.
Earlier this year, Bloomberg reported that Gojek led advanced merger negotiations with Tocopedia, one of Indonesia’s largest e-commerce sites. The combined entity plans to be listed by the United States and Indonesia.
According to a press release, the agreement “marks the largest business combination in Indonesia to date and the largest between two Internet companies and a service company based in Asia to date.”
To put the values of the companies in context, Gojek is currently estimated at about 10.5 billion US dollars, while Tokopedia is estimated at about 7.5 billion US dollars.
The group also claimed to have achieved a total gross transaction value of the group of over $ 22 billion in 2020, as well as over 1.8 billion transactions.
The combined ecosystem of Gojek and Tocopedia accounts for two percent of Indonesia’s gross domestic product. The company is supported by investors including Alibaba Group, Google, Temasek, Facebook and Paypal.
The creation of the GoTo Group, with its wide and fast delivery services and deep penetration, will mean that e-commerce delivery on the same day is approaching the step towards becoming the norm in Indonesia. GoTo will also further develop its payment and financial services offerings to provide an improved financial experience to consumers, drivers and traders, while at the same time expanding to 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, Gojek’s Andre Soelistyo will lead the combined business as CEO of the GoTo Group, and Tocopedia’s Patrick Cao will be the President of the GoTo Group.
Both Kevin Aluwi and William Tanuwijaya will remain as CEO of Gojeka and Tocopedia, respectively. The two companies, however, did not mention the financial details of the merger.
Gojek, interrupted connection of Graba
Prior to merging with Tocopedia, Gojek reported that he was considering merging with Grab. The merger is, however, canceled in January this year.
Sources familiar with the matter The Business Times that the two largest firms in the region could not agree on various issues, including “valuation and corporate culture”.
News of a possible merger also led to public reaction in Indonesia, with Indonesian unions of motorcycle drivers threatening to start protests for fear of big job losses.
Credits for featured images: Mime Asia / Go Compass