January 18, 2018
By Anshuman Daga
SINGAPORE (Reuters) – Alphabet Inc’s <GOOGL.O> Google, Singapore state investor Temasek and Chinese online platform Meituan-Dianping are investing in Indonesian ride-hailing start-up Go-Jek as part of a $1.2 billion fundraising round, sources familiar with the matter said.
The investments by Google – its first in a ride-hailing firm in Asia – and the other prominent investors underscore both the potential of the business in Southeast Asia, a region of 640 million people, as well as the competitive threat in the ride-hailing environment.
As Go-Jek’s rivals Grab and Uber Technologies have expanded their presence in the region, the need for backing from deep-pocketed investors has risen. Ride-hailing companies have been spending heavily to attract both riders and drivers, with discounts and promotions that have hurt their profit margins.
“As a strategic investor, Google can add a lot to Go-Jek’s business,” said one source.
Grab and Uber are backed by Japan’s SoftBank Group <9984.T>, while Go-Jek has secured investments from Chinese technology giants Tencent Holdings Ltd <0700.HK> and JD.com Inc <JD.O>.
In the latest funding round, Go-Jek’s existing investors such as global private equity firms KKR & Co LP <KKR.N> and Warburg Pincus LLC are also participating, the sources said. The funding round opened last year and is expected to close in a few weeks, they said.
It was not immediately clear how much the investors are pumping in individually. Breakingviews said, citing sources, the new money from investors values Go-Jek group at roughly $4 billion, compared to more than $6 billion for Grab.
Google, KKR, Meituan-Dianping, Temasek and Warburg declined to comment. Go-Jek did not respond to requests for comment. The people declined to be identified as they were not authorized to speak to the media.
Both Grab and Uber are expanding in Go-Jek’s home market, which is Southeast Asia’s most populous country and where locals are keen to lap up an array of mobile-based services. Southeast Asia is the world’s third-biggest ride-hailing market after China and the United States.
Go-Jek, which began as a ride-hailing app for motorcycle taxis, operates mainly in Indonesia but is developing a food delivery business. Its mobile payment business, Go-Pay, is also growing rapidly.
Reuters reported last year that JD.com was investing about $100 million in Go-Jek. This followed an investment by Tencent, which is also an investor in JD.com.
Last week, Hyundai Motor Co <005380.KS> said it had invested in Grab.
(Additional reporting by Julie Zhu and Sumeet Chatterjee in HONG KONG; Editing by Muralikumar Anantharaman)
