Kevin Aluwi and William Tanuwijaya recently made Indonesian history.
As founding members of the GoTo Group, the 30-year-olds are responsible for creating Indonesia’s newest and most valuable tech company after turning their ride-hailing and e-commerce startups into the biggest business in the country ever.
The combined company is contributing 2% to Indonesia’s GDP across its various lines of business, including a powerful super app, according to the company. And that is just the beginning.
“Hopefully one day we will add 5 to 10%,” said Tanuwijaya, co-founder and CEO of Tokopedia CNBC does it.
But maybe you have never heard of it. What exactly is GoTo and how did it get so big?
The GoTo Group is an Indonesian tech giant founded in May 2021 through a blockbuster merger between two of the country’s largest startups: Gojek and Tokopedia.
Tokopedia was founded one year apart in the capital Jakarta and started in 2009 as an e-commerce marketplace to connect small traders with buyers, while Gojek was launched in 2010 as a ride-sharing platform for motorcycle taxis.
Both companies were owned by a. founded Group of friends in their twenties, who at the time were responding to an emerging wave of Internet connectivity that swept the country.
“There was kind of a turning point where people began to see the potential of the internet, especially with the advent of mobile devices,” said Aluwi, Gojek’s co-founder and CEO.
In a vast country with the the fourth largest population in the world and a rapidly growing middle class, the founders were looking for something. In the years that followed, both companies ventured into digital payments and other services.
Tokopedia has doubled in size to add new market segments such as parents and small stallholders to its ecosystem. In the meantime, Gojek has expanded its ride-hailing platform regionally and expanded its local super app, which offers users on-demand services from food to massages and manicures.
In 2015 the two started working together, using Gojek drivers to deliver Tokopedia products on the same day outside of rush hour.
“We were the first in the world to form a partnership between an on-demand platform and an e-commerce platform,” said Aluwi.
Six years later, amid growing competition from regional and global tech companies, the two agreed to officially merge last month into a $ 18 billion deal – Indonesia’s greatest ever.
“Imagine Amazon, DoorDash, over, PayPal‘Stripe is combined, “said Tanuwijaya.” There is a saying that if you want to go fast, you go alone; if you want to go far you go together. So GoTo basically means to go far, to go together. “
In the new structure, Andre Soelistyo from GoJek will take over as CEO of GoTo Group and GoTo Financial, Patrick Cao from Tokopedia will become President, while Aluwi and Tanuwijaya will remain CEOs of Gojek and Tokopedia respectively.
The combined company has over 100 million monthly active users, more than 11 million dealers and over 2 million drivers in an ecosystem that 2% of Indonesia’s GDP of $ 1 trillionannounced the company.
GoTo hopes to use it to capture more of the market in Indonesia and beyond.
Indonesia’s digital economy is expected to be worth $ 124 billion by 2025 as the value of the broader Southeast Asian online market triples to more than $ 309 billion. According to a recent study.
“Indonesia remains because of the population in Southeast Asia, the enormous economic growth projections for the next 10 years or so and (and) a truly consumer-oriented economy that is turning into a consumer-oriented economy,” said Florian Hoppe, partner at Bain & Company and co-author the study.
“Much of the early growth was driven by major urban centers, was driven by Java,” he said. “The next half will be the really interesting story. How do you get there? Establishing logistics services there, integrating them for payments, really integrating them into the digital economy. ”
For GoTo, this includes providing payments and financial services in a country where 47 million adults do not have access to popular financial services and products, and 92 million people have never used a bank.
“It’s these people, with or without a bank account, where illness or economic shock can really make the difference between belonging to the middle class and falling back into poverty,” said Aluwi. “So this is both a great business opportunity and an area where we really believe we can make a big difference.”
So far neither Gojek nor Tokopedia is profitable.
GoTo reportedly planning another round of fundraising ahead of a public listing, likely in Jakarta and the US The company already has an impressive list of investors like Softbank, Alibaba, Tencent, Facebook and Google.
“As for the timeframe, not just for the IPO but for all product development, my timeframe is always yesterday,” said Tanuwijaya. “But to be realistic for the team and so on, it’s as soon as possible. We hope we can try to get on the list hopefully by the end of this year.”
In April, the competing super app Grab completed a Nasdaq listing the world’s largest “blank check merger” – an acquisition company for special purposes worth nearly $ 40 billion. GoTo is intended to be a public market valuation target for $ 35 to $ 40 billion.
The GoTo and Grab IPOs will also serve as a litmus test for the region. If successful, it could pave the way for more tech startups as investor appetite grows.
“Historically, Southeast Asia has had a slightly more difficult time getting on the radar alongside China and India,” said Hoppe. “The last few years have shown that the digital economy is now at least competing with India. But the potential is clearly there and I think international investors have become aware of it.”
With the newly combined resources and thriving business in the new landscape, the company is now planning its expansion strategy, including an ambitious promise of sustainability.
“GoTo comes with a great responsibility,” said Tanuwijaya. “We’re trying to provide solutions to a problem we figured out a decade ago. But that solution will also create another problem: with millions of drivers, emissions, so many dealerships, packaging, and so on.”
“So we’re committed to truly zero waste and zero emissions by 2030 and become a company that can be a legacy for the next generation.”
The bold ambitions imply that the GoTo of 2030 could look very different than it is today. But when it comes to executives, they’re just getting started.
“There is no doubt that our ambitions are global,” said Aluwi. “We are not only active in Indonesia and believe that the future of our combined group is beyond one country.”
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