The deal, which combines e-commerce, on-demand and financial services, marks the largest ever business combination in Indonesia
Indonesian ride-hailing and payments firm Gojek and marketplace Tokopedia have agreed to combine their operations, creating a new entity, known as GoTo Group.
The $18bn merger, which combines e-commerce, on-demand, and financial services, marks the largest ever business combination in Indonesia. It is expected to create a “go to” ecosystem for daily life in the country.
Gojek is worth $10.5bn and Tokopedia $7.5bn as per the most recent funding valuations.
Together, the two entities had more than 1.8 billion transactions last year and over 100 million active users to date.
They had a total registered driver fleet of more than two million as of December 2020 and over 11 million merchant partners as of December 2020.
The deal is supported by investors including Alibaba Group, Astra International, BlackRock, Capital Group, DST, Facebook, Google, and JD.com.
It also supported by KKR, Northstar, PayPal, Pacific Century Group, Provident, SoftBank Vision Fund 1, Sequoia Capital India, Telkomsel, Temasek, Tencent, Visa and Warburg Pincus.
The new entity will continue to focus on the markets where Gojek already operates (Vietnam, Singapore and Thailand).
Also, it will further develop its payments and financial services offerings to provide an enhanced financial experience to consumers, drivers and merchants.
Gojek co-CEO Andre Soelistyo will head the combined business as GoTo Group CEO, with Tokopedia president Patrick Cao will serve as the president of the new entity.
Kevin Aluwi will continue as CEO of Gojek and William Tanuwijaya will remain CEO of Tokopedia.
Soelistyo will also continue to lead payments and financial services, under the new brand of GoTo Financial, which includes GoPay and the merchant and financial services offerings of the group.
Soelistyo said: “Today is a truly historic day as we mark the beginning of GoTo and the next phase of growth for Gojek, Tokopedia and GoTo Financial.
“Gojek drivers will deliver even more Tokopedia packages, merchant partners of all sizes will benefit from strengthened business solutions and we will use our combined scale to increase financial inclusion in an emerging region with untapped growth potential.
“For the consumer, GoTo Group will continue to reduce frictions and provide best in class delivery of goods and services. This is the next step of an exciting journey and I am humbled and proud to lead the GoTo movement.”
Goldman Sachs is serving as the financial advisor, and Davis Polk & Wardwell and Assegaf Hamzah & Partners are providing legal services to Gojek on the transaction.
Citi is serving as the financial advisor, and Allen & Overy is acting as legal advisor to Tokopedia.
The Gojek-Tokopedia merger deal follows the $39.6bn merger of Grab with Altimeter Growth, a US-based special purpose acquisition company.