Sunday, 2024 May 26

Deals | Go-Jek was offered additional $1 Billion war chest as competition with Grab intensifies

Indonesia’s on-demand services platform, Go-Jek reportedly has been offered a minimum of $1 billion additional funding from existing investors, according to a Bloomberg report citing people familiar with the private matter, as the regional unicorn locks horns with Grab in an increasingly heated land grab across the region of Southeast Asia.

Some of the prominent investors include Chinese internet giant, Tencent Holdings Ltd and Warburg Pincus.

However, Go-Jek, per the informed people told Bloomberg, hasn’t decided on whether it would take up on the offer or not.

Go-Jek’s Jakubowski unveiled on Wednesday the company’s goal to accelerate the potential of the Southeast Asia region via technology at a big Singapore tech conference, just a day after Grab launches its Grab Ventures at the same event.


Intensified competition

Go-Jek’s humble beginnings in Indonesia as an app for booking motorbike taxis, grew rapidly and today it has become a ‘’super-app’’, offering anything you can think of, from rides, meal delivery, massage to home cleaning services, all at a click on your mobile.

According to a recent Bloomberg article, Go-Jek’s app currently facilitates more than 100 million transactions monthly in its domestic market. It has also garnered more than 60 million downloads in Indonesia.

The Jakarta-based startup’s latest round of $1.5 billion funding, saw it grow to an approximate $5 billion in valuation.

It’s noteworthy to mention that Go-Jek’s phenomenal domestic success could be quite significant, especially with Indonesia accounting for 43.5% of the total 600 million people in the region.

Just two weeks ago, the company announced a commitment of US$500 million to expand into Vietnam, Thailand, Singapore and the Philippines later this year, signaling an imminent head-to-head battle with Singapore-headquartered Grab for a slice of the Southeast Asian market.

While the entry of Go-Jek, a formidable Indonesian giant that can be compared with Grab in terms of market capitalization size, might allay some concerns of many Singaporeans over the possibility of exorbitant monopolistic ride-hailing prices after Uber’s exit in the region, Go-Jek might not adopt the Uber approach, offering hefty discounts to engage in a bleeding price war with Grab, according to a Channel News Asia commentary.

Editor: Ben Jiang



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