GoTo bets on local IPO to avoid tough global markets
Asia Tech Review: 13 April 2022
It’s not every week that this newsletter ships on a Wednesday—that’s mid-week—but then it’s not every week that we see an IPO like GoTo.
This really is a once in a lifetime event, and I don’t mean that in a hyperbolic ‘this is the new Facebook/Google’ way. This listing is unique. Two of Indonesia’s oldest and most decorated companies came together to merge, and the entity went public in an historic first major tech IPO in Indonesia. Then there’s the current climate for stocks, which is hardly favourable, and the struggles that rival Grab and former rival Uber are going through… and Indonesia’s status as an increasingly important tech market.
This week I penned a few thoughts to try to add to what’s already out there on GoTo—we do, of course, have the rest of the week’s news, albeit a little later than usual.
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Stories in focus: It’s GoTo week
Finally the day has come, and Indonesia’s national pride IPO—the merged entity of Tokopedia and Gojek—listed in Jakarta. The initial results were good, the price popped over 20% and ended day up more than 10%.
It's hard to overstate just how significant this listing is. Both companies have blazed a trail for what entrepreneurs can do in Southeast Asia, let alone Indonesia itself. These are two companies that built the path for countless other companies to follow, and they’ve helped build a vibrant ecosystem that’s also acknowledged and supported by the government. The big question now is whether that national pride can help GoTo weather challenging conditions for public companies worldwide.
With that in mind, I jotted a few notes down from my time covering these companies as a reporter:
Trail blazers: Tokopedia was the first in Southeast Asia to raise capital from SoftBank (way back in 2014—I remember being on vacation and being stunned) and other truly global investors, helping to put the region on the map as a tech destination, while Gojek too pulled in investment from Sequoia early-on (it was a stealthy deal in 2015) and raised huge sums when few others could, including $1.2B from Tencent in May 2017.
Support in high places: They’ve found allies within the Indonesian government, joining various task forces and receiving the backing of President Jokowi, who even recruited then-Gojek CEO and founder Nadiem Makarim into a cabinet role. There’s always been chatter as to whether the government really played a role, or the timing was simply fortuitous. Either way, Indonesia has, to its credit, built on their success and let them and other startups into the fold with government programmes including education and healthcare, particularly around the pandemic.
Domestic focus: Their pairing is fascinating as, in theory, both are batting for SMEs and MSMEs in Indonesia. Tokopedia handling the traditional e-commerce and supply, Gojek the delivery operations and payment with some overlap in the middle. Their pairing did also end any real possibility of becoming a regional business. Tokopedia has never ventured outside of Indonesia, while has since sold off its business in Thailand (to AirAsia) and Coins, the fintech startup it bought in the Philippines but never made use of. That strategy suited the pandemic, as it happens, and it also plays to GoTo’s public market storybook as an Indonesian powerhouse.
Balancing act: But—and you knew there was a but coming—the big question is the tradeoff between the struggle of ride-hailing companies and GoTo’s domestic position as the country’s tech giant. Grab’s share price is struggling, Didi has struggled (admittedly through its own unique situation as a Chinese tech firm) and Uber has had to reinvent its position by embracing licensed taxis and entering other areas that the old Uber wouldn’t have stepped into. The ride-hailing bubble has popped and public markets just see deeply unprofitable businesses—heck, in some places consumers are even taking taxis again like it’s the new thing. GoTo is now one of Indonesia’s top four companies based on market cap, but that’s trading at around 10X its sale—Grab and Uber meanwhile are at around 2.5-times, according to Bloomberg.
Tl;dr: Going public in Indonesia first wasn’t as glamorous as heading to the US, but the big bet is that local relevance, brand and pride can beat out the economics of US public markets. It’s a truly intriguing one to follow. Personally speaking, I’ll continue to take my chances on the crypto market—but I have some decent reasons for that.
Beijing has ended a nine-month freeze on approving new video licences link
China has targeted algorithms from the likes of Tencent and ByteDance as a national crackdown on social media platforms and their influence continues link
Shein raised as much as $2B in round valuing it at $100B according to the Wall Street Journal—which reports the deal, first raised by Bloomberg last week, has now closed link
ByteDance made fake accounts with content scraped from Instagram and Snapchat while chasing those companies in 2017, according to former employees link
JD.com’s founder Richard Liu is the latest Chinese tech billionaire to step back after handing he CEO role over link
Nio is in talks with carmakers to licence its battery-swapping technology in Europe link
It’s been revealed Moore Threads, a Chinese AI chip firm billed as an answer to Nvidia, used a UK-based firm to develop what it described as a homegrown chip—a detail that lessens the significance of the product which is part of China’s push to develop its own chip industry firms link
Electronic waste in the world’s largest smartphone market is an increasing problem after mobile phone ownership reached 1.8 billion units in 2021. As more Chinese consumers upgrade their devices to newer models each year, old handsets are piling up but fewer than 2% are properly recycled link
Zhiyi Tech raises $100M to help fashion brands predict bestsellers link
ByteDance is reportedly testing a news aggregation app that targets power readers—the company may be best known for TikTok but it is also famous for incubating and launching dozens of apps and services link
Tencent is shutting down its video game streaming platform months after Beijing shut down a huge merger that would have made the Chinese internet giant a major player link
A Reuters report has found that dozens of firms built software that uses AI to sort data collected on residents, amid high demand from authorities seeking to upgrade their surveillance tools link
Didi Chixung has shut down its operations in South Africa one year after launch link
Gaming startup Mobile Premier League is in talks to raise capital from crypto exchange FTX and others to make a web3 push link
India has ordered antitrust investigation into Zomato and Swiggy conduct following a complaint from the National Restaurant Association of India, a body that represents over 50,000 restaurants in the country link
Flipkart has internally raised its IPO valuation target by around a third to $60-70 billion—but has pushed US listing date back to 2023 link
VerSe Innovation, the parent firm of news aggregator app Dailyhunt and short video app Josh, raised $805M at a $5B valuation link
Cred is in talks to raise $200M led by Singapore’s GIC at a valuation of $6.5B link
Meanwhile, there was a flurry of Coinbase news:
The exchange plans to hire 1,000 people in India this year and ramp up its investments in the country link
Coinbase has also debuted its crypto trading platform in India, which initially include support for the UPI payment system link
However, there was visible tension when the Indian payments body—which oversees UPI—refused to acknowledge Coinbase’s India launch link
Things came to a head when Coinbase suspended support for UPI, a potential gamechanger, less than a week after launching the payment option—it’s not clear when it will return link
Social gaming startup Bombay Play raised $7M led by Kalaari Capital link
India blocked 22 YouTube channels over national security concerns link
Also in gaming, Nazara investsed $2.5M web3 VC Bitkraft Ventures’ latest fund link
After many delays, Tata Digital unveiled its super app called Tata Neu link
Elevation Capital (formerly Saif Partners) closed its eighth India-dedicated fund at $670 million, its largest ever link
Dyte, a live video and audio platform, raised $11.6M led by Unbound, Sequoia Capital India's Surge and Nexus Venture Partners link
Zilingo, a fashion tech startup that’s long been tipped as a major player, is going through some turmoil after Bloomberg reported it had suspended its CEO while it investigates apparent irregular accounting practices link
Axie Infinity creator Sky Mavis raised $150M round to compensate victims of ~$625M Ronin hack—Binance, Animoca and A16z were among the investors link
The Philippines now has a second payment unicorn after Voyager, the parent behind the Payamaya app, raised $210M at a valuation of $1.4B—rival Mynt earlier raised over $300M last November at a valuation of $2B. It’s worth remembering Alibaba is an investor in Mynt and Tencent is among the backers of Voyager link
Singapore could also get a new payment unicorn of its own with Coda reportedly close to raising new funding at a valuation of $2B.5—additional context: Coda was reportedly shopping around for a buyer at a valuation of $4B last year, now it appears to be continuing its journey solo
Three years after Gojek bought Philippine startup Coins.ph for US$95 million, it has sold it for reportedly around double the amount to Wei Zhou, the former CFO at crypto exchange Binance and before that gay dating app Grindr. That’s according to a scoop from my former colleague Ka Kay Lum at The Ken link
Japanese crypto exchange bitFlyer to be sold to Singapore-based investment fund ACA for $370M link
After cancelling its SPAC, lending startup FinAccel is spending $200M for Indonesia digital banking push—which includes buying a 75% stake in PT Bank Bisnis Internasional TB link
Gotrade, which lets international users buy fractional shares of US stocks and ETFs, raised a $15.5M Series A link
Gojek founder Nadiem Makarim, now Indonesia’s education minister, wants to build another super app—this time it’s for teachers link
Thai state energy group PTT is in talks to build electric vehicles for Chinese automakers as its joint venture with Taiwanese contract manufacturer Foxconn aims to start production in 2024 link
Hackers use malicious apps to target customers of 8 Malaysian banks, researchers say link
The Parentinc, a Singapore-based startup that runs a parenting community, media business theAsianparent and direct-to-consumer product line, raised $22M link
Sequoia-backed SwooshTransfer raised “several million dollars” from Sequoia China and others to automate cross-border payments link
E-commerce aggregator Wholesum raises $50M Series A link
Korea has ruled that Google can’t punish South Korean app developers for offering payment workarounds, in what is a blow to the US tech giant’s efforts to maintain its lucrative commission on digital sales in the country link
Samsung’s first-quarter earnings topped analyst estimates thanks to robust demand for memory chips and smartphones link
Virgil Griffiths, a well known figure in the cryptocurrency industry, was handed a 5-year jail sentence for allegedly helping North Korea avoid US sanctions after he presented at a cryptocurrency conference in Pyongyang in 2019 even after the U.S. government denied his request to travel link
Japan has launched university fund to spur innovation around startups link
Taiwan's spy catchers have launched probes into around 100 Chinese companies suspected of illegally poaching semiconductor engineers and other tech talent, a senior official at the island's Investigation Bureau told Reuters link
TSMC, the world’s largest contract chip maker, saw sales soar to record levels following strong demand for chips for smartphones, cars and more link
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