Approaching the IPO Moment, GoTo's Valuation to Reach 403 Trillion

Last week (20/10) the decacorn GoTo Group announced a strategic cooperation agreement with the Abu Dhabi Investment Authority (ADIA) subsidiary. As a follow-up, ADIA led the fundraising for GoTo's pre-IPO worth $400 million or equivalent to IDR 5.6 trillion. This funding is estimated to boost the company's valuation to $28.5 billion or equivalent to IDR 403.7 trillion – according to Reuters' sources.

This value increased significantly compared to the previous estimated valuation of $18 billion, by combining each company's valuations as they were doing separate fundraising. Today's situatuion is estimated to bring GoTo's value to more than $30 billion in the lead-up to its IPO, with the public investment climate gains its best momentum.

"We are proud to welcome ADIA as the company's newest investor and the first in our pre-IPO fundraising, as we prepare the business for exponential growth for years to come. This kind of support underscores our belief that Indonesia and Southeast Asia will be the next big destination for technology investment," GoTo Group's CEO, Andre Soelistyo said.

He said, GoTo has generated more than 1.8 billion transactions in 2020 with a total GTV of more than $22 billion. In the company's ecosystem, there are more than 11 million partners, with the majority being MSMEs and more than 2 million driver-partners.

Fluktuation before IPO

Although it has not been officially announced, the GoTo IPO plan is predicted to be finalized in early 2022. Sources say that the go-public process will start at the local exchange (IDX), followed by New York.

"The IPO is one of our strategies to support the company's sustainable growth. What we can ensure is that GoTo will always comply with all applicable regulations in carrying out every corporate action," a company representative said to DailySocial.id.

The success of Bukalapak's IPO at IDX and Grab's previously announced plan to go public via SPAC become the benchmarks for 'success' to the next unicorn that will enter the stock market. Grab's plan was delayed from the schedule, the SPAC agreement was targeted to complete in mid-2021. It is actually due to the request for a financial audit from the local exchange authority. The company is targeting a valuation of nearly $40 million just before going public.

The startup path to the stock exchange is being tested with various uncertainties. Including the declining interest in public offerings through SPAC – as it was too blatant. In 2021, there will be a lot of SPAC transactions on the NASDAQ, which will have an effect on the decline in the selling price of shares to below the expected nominal value. According to EY data, as of H1 2021 there were 634 successful SPAC transactions, a new record on the local stock exchange.

Previously, rumor has it that Traveloka would make a deal with Bridgetown Holdings Ltd. for SPAC. However, as we've recently informed, Traveloka's board of directors decided not to proceed with this step. The company is likely to explore the traditional IPO process, remaining on US exchanges, according to Bloomberg sources.

On the other hand, Bukalapak's corporate action in August 2021 also illustrates the good enthusiasm of local investors in welcoming local unicorns to the stock market.

Gojek-Tokopedia synergy

The GoTo Group continues to strive to accelerate its business pace, especially by combining the capability of Gojek and Tokopedia. Several initiatives were recently announced, such as setting Gopay and Gopaylater as the main payment options on Tokopedia.

"In addition, the synergies embodied in the GoTo ecosystem include cross-selling and upselling, a wider hyperlocal delivery network, the largest digital payment ecosystem and financial technology, as well as promotions and loyalty programs to expand users," GoTo's Corporate Affairs Nila Marita added.

Synergy is also designed to expand opportunities for Gojek driver partners to earn additional income, among others, realized through a number of Gojek and Tokopedia collaboration programs such as Indonesia Shopping Time (WIB). Driver partners have the opportunity to be able to send more orders from Tokopedia consumers.

"This business synergy also opens up great opportunities for GoTo to expand in several lines, such as daily necessities (grocery), fast-moving consumer goods (FMCG), and logistics," Nila said.

–Original article is in Indonesian, translated by Kristin Siagian