The Amazon of Indonesia? GoTo Group IPO Decacorn — Gojek Merges With Tokopedia

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Gojek, a CNBC Disruptor 50 company, and e-commerce player Tokopedia recently announced a merger to create the GoTo Group. GoTo plans to complete an IPO in 2021, which will be listed in Jakarta and the United States, with an expected valuation between $35 and $40 billion. This historic merger marks Indonesia’s largest business deal. That’s right, Indonesia has its very own decacorn — a start-up unicorn with a valuation of more than $10 billion.

Indonesia offers tremendous growth opportunities. The Southeast Asian total addressable market is expected to triple to $309 billion by 2025, and $124 billion of that TAM is represented by Indonesia.

Combining Gojek and Tokopedia will create a tech giant comprising

  • 100+ million monthly active users
  • 11+ million merchants
  • 2+ million drivers
  • 2% of Indonesia’s $1 trillion GDP

An estimated 119 million Indonesians live in rural areas. Indonesia is a large, complex archipelago of 17,508 islands, which creates a logistical nightmare for businesses like Gojek and Tokopedia. Combining forces makes sense, and it can unlock tremendous operational advantages. I see this as a threat to Sea Limited‘s (NYSE:SE) Shopee e-commerce business, which has already been losing market share to Tokopedia.

Combining Gojek and Tokopedia will also allow GoTo Group to take on larger rivals such as Grab, which is based in Singapore and also looking to complete a SPAC with Altimeter Growth Corp (NASDAQ:AGCU.U) later this year. Upon completion, Grab’s plan is to list on the NASDAQ using the ticker symbol GRAB.

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GoTo has opportunities in several business segments. An estimated 92 million Indonesians are unbanked, which creates an enormous opportunity for GoTo Group’s financial technology (fintech) division.

Could GoTo Group be a three-headed monster like Singapore’s Sea Limited? Or even the Amazon (NASDAQ:AMZN) of Indonesia? 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.



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