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INDONESIAN GIANT
"GoTo will be be unique in its ability to cover two-thirds of Indonesian consumer expenditure", Tokopedia President Patrick Cao told reporters. "If you look at our regional peers, they exceed only at covering one sector." Cao will become GoTo's president and Gojek CEO Andre Soelistyo will be CEO of the group that says it has more than 100 million monthly active users and a registered driver fleet of more than 2 million.
GoTo's deal came together quickly in December after months of negotiations between Gojek and Grab fell apart.
Gojek and Tokopedia's executives have personal and family ties and held discussions about a deal in 2018, sources said.
Using the model of Alphabet, Gojek and Tokopedia plan to remain separate but work together on payments, logistics and food deliveries.
Read Also: Indonesia's Gojek, Tokopedia merge to create tech champion
While e-commerce is booming in Indonesia, with its digital economy economy expected to grow to $124 billion by 2025, according a 2020 study by Google, Temasek Holdings and Bain & Company, its 17,000 islands are spread across an area bigger than the European Union, making it extremely costly.
GoTo is also betting on its financial arm, which will own 22% of Indonesian digital lender Bank Jago.
Of Indonesia's population of 270 million, half lack bank accounts but most now have mobile phones.
Goldman Sachs is the financial advisor to Gojek, and Citi is the financial advisor to Tokopedia.
Investors told Reuters the merger will herald a wave of Indonesian listings, with e-commerce company Bukalapak and travel app Traveloka expected to list this year.
"This is the beginning of us proving how local startups can grow at scale and from Indonesia to the world", said East Ventures founder Willson Cuaca, an early backer of Tokopedia and Gojek shareholder.
