Google,, Tencent back Gojek in fight with Grab

The fight for Southeast Asia's ride-hailing market just went up a gear. Gojek will use another $1 billion from investors to compete with Singapore’s Grab. Breakeven may have to wait.

Gojek's warchest is being replenished in its cut-throat battle for dominance in Southeast Asia's massive ride-hailing market, underlining the support the four-year-old Indonesian company continues to enjoy from its powerful allies.

A person familiar with the deal said on Friday that Gojek has so far raised over $1 billion from existing shareholders in this new round of fundraising, which values the company at close to $10 billion pre-money.

The funds raised will be used to defend and deepen Gojek’s market penetration in Indonesia and strengthen its presence in Singapore, Vietnam and Thailand, Gojek said in a subsequent emailed statement. 

The company is also evaluating entering Malaysia this year, Andre Soelistyo, Gojek’s president said in an earlier interview with FinanceAsia

To date, Gojek has already corralled capital from US search giant Google, China’s and Tencent, Japanese trading house Mitsubishi Corp as well as Indonesia-focused private equity firm Provident Capital — and this is only the first close in its ongoing series F fundraise.

Gojek is locked in a battle for market share with another Southeast Asian unicorn, Singapore-headquartered Grab, which counts Japan’s SoftBank among its backers. Both companies are growing fast but are as yet unprofitable.

The intense competition between the two players, across services from bike hailing to food delivery, means that they are burning the cash raised from investors and pushing back the date the firms will break even. 

Investors have so far not blinked.

As of October, Gojek had raised about $3 billion over seven fundraising drives while Grab had gathered $7.3 billion across 22 rounds as of January 30, according to database Crunchbase.


Eyes are fixed firmly on the prize of market leadership in Southeast Asia’s largest economy. If either competitor can establish a dominant position in Indonesia then they would have a sound base from which to subsidise their expansion across the region at a time when consumers are switching onto the digital economy at an accelerating rate.

Southeast Asia’s rapidly expanding digital economy will grow to $240 billion by 2025, according to a report by Google and sovereign wealth fund Temasek.

Investors also know that the competition is actually speeding up the development of digital adoption across Indonesia, making the eventual prize even more valuable. 

All the participants in this Battle Royale know that the pace of fundraising may slow given valuations globally, in both public and private markets, have taken a battering in the past six months. Grab and Gojek have also been raising the stakes for investors, by asking for capital at spiralling valuations. Future investors will want to know there is still some upside in the price, be it via another private funding round or through an initial public offering of shares. 

“Winter is coming,” Soelistyo said during the interview last week in Jakarta, sensing a slightly chillier reception from investors during this fundraising process due to the broader deterioration in the investment climate.


A key element to winning the battle for Indonesia will be the ability to lock in merchants to sell products over their burgeoning digital marketplaces on their platforms, investors, analysts and bankers told FinanceAsia.

Whilst startups are still in the red, it is crucial to demonstrate a clear path to profitability. Gojek partially withdrew subsidies for its food delivery service Go-food before a recent fundraising to show investors that demand for the service was robust, according to one banker familiar with the firm’s business model. Analysts believe that Go-food is highly profitable.

Go-food processes $2 billion of annualised gross transaction value (GTV) making it the largest food delivery service in Southeast Asia, Gojek said in the statement.

“The path needs to be clear …  [the business] doesn't have to be profitable but it needs to have an indication it will be,” Soelistyo said.

As investor sentiment cools it will, of course, be the weaker players who feel the hardest squeeze.

“This more rational demand [from investors] allows the better companies to continue to survive and differentiates the real executors [of strategy],” Soelistyo said. 

Adding fuel to the fierce competition, Gojek’s investors are pledging more than just money: they are mingling their own operations with those of the Indonesian company's in an effort to boost the network effects enjoyed by themselves and their protégé.

As an example, Gojek said it will work more closely with’s Indonesian e-commerce joint venture,, and its last-mile delivery logistics joint venture, J-Express.


Both Gojek and Grab are claiming leadership in the race to win Indonesia, according to slightly differing metrics. Grab says it has the most four-wheeled vehicles in circulation across Indonesia. 

Gojek says it has the larger number of bikes plus cars on the road in Indonesia. Gojek also said on Friday that it is Southeast Asia’s largest mobile on-demand service and payments platform with an annualised GTV across all markets of more than $9 billion and annualised transaction volumes of 2 billion by end of 2018.

The payments app that glues the ecosystem together, Go-pay, processes $6.3 billion of annualised GTV.

Gojek said its entry into new markets has exceeded its expectations.

In Vietnam, Go-Viet gained an estimated 40% of the two-wheeled transport market share within three months of launch in August. Go-Viet’s food delivery service has also become the leading player among comparable food delivery services within only two months of launch in Ho Chi Minh City and recently in Hanoi, Gojek said in the statement. 

Following the close of the series F fundraising, Gojek’s founders will continue to maintain control over the decision-making and direction of the company, the statement said, without giving an up-to-date breakdown of the different shareholdings.

¬ Haymarket Media Limited. All rights reserved.
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