Malaysia’s AirAsia acquires Gojek’s Thai business in $50m stock swap deal

Photo by Afif Kusuma on Unsplash

Malaysia’s budget airline carrier AirAsia Group is acquiring Indonesian ride-hailing and payments firm Gojek’s Thailand business in a stock swap deal, which would result in Gojek owning a 4.76% stake in AirAsia’s lifestyle platform. 

AirAsia will acquire Gojek’s business for $50 million worth of shares in AirAsia SuperApp Sdn Bhd, valuing the division at around $1 billion. 

According to a stock market filing, $40 million will be used to acquire 100% equity interest in Velox Technology (Thailand) Co Ltd, while the remaining $10 million will be used to acquire 100% equity interest in Velox Fintech Co Ltd.

AirAsia CEO Tony Fernandes said in a virtual press conference that the acquisition marks the company’s big digital business push into the Thai market, as Gojek already has a strong footing in the country with a base of thousands of riders and merchants. 

“We want to take the great work that Gojek has done and build on it by expanding into other towns in Thailand. That has been our strength there – we have opened up many routes and many destinations, making our brand very well known in Thailand,” said Fernandes. 

Gojek CEO Kevin Aluwi said the deal is a testament to its team’s accomplishments in Thailand, which grew the business from the ground up in 2019 to become a leading on-demand service provider. 

He added that the transaction also provides Gojek with the opportunity to focus on the markets that it can commit significant resources to – Vietnam and Singapore. 

“While we remain committed to our overseas markets, we decided that our priority was to really invest in Singapore and Vietnam, due to the scale of business that we have in those markets. When we realised that we could not properly commit the right resources to make Thailand as ambitious as Singapore as Vietnam, we began the [exit] conversations,” said Aluwi. 

Gojek’s Thai business made a loss in 2019 and 2020, according to financial data provided with the deal announcement, Reuters reported.

Gojek is preparing to launch its car service in Vietnam in the next few months, followed by an e-payment service later this year. DealStreetAsia reported that the firm has been granted a licence and is now recruiting drivers. This service will be deployed in Ho Chi Minh City first then expanded to Hanoi.

In Singapore, the company launched GoTaxi, a taxi-booking feature on its app in early May. Rides booked through GoTaxi are charged a metered (rather than fixed) fare, and riders will see an estimate of their fare at the time of booking. GoTaxi will complement GoCar — Gojek’s existing ride-hailing service that matches customers to either private-hire vehicles or taxis.

In its filing, AirAsia said Thailand has been experiencing an e-commerce boom over the last five years, bolstered by the rapid development of technology and ongoing government initiatives to become a digital economy. 

Coupled with the increasing support by the Bank of Thailand towards payment service providers to boost Thai’s e-commerce sector, both Velox Technology and Velox Fintech are poised to undertake the increasing growth opportunities at hand.

AirAsia’s non-flight path

Badly hit by the pandemic, AirAsia has embarked on cost containment measures in 2020, which includes salary cuts, staff downsizing, as well as payment restructuring. The measures paid off in the first quarter of 2021 when it saw its fixed cost reduced by 54% while airline staff cost was reduced by 62% year-on-year.

AirAsia’s digital arm, which comprises focusing on a super app platform, fintech unit Big Pay; and its profit-making logistics arm Teleport has contributed 39% to its group revenue in the first quarter of 2021, compared to 8% in the previous year.

In March this year, the group launched its food delivery service AirAsia Food in Malaysia and Singapore, in an effort to penetrate into a segment that saw unprecedented growth amid COVID-induced movement restrictions. It also conducted pilot tests for drone delivery in Malaysia.

Fernandes has mentioned plans to launch an air taxi service, aside from a ride-hailing service to compete with the likes of Grab. “I’ve got eight years of Grab doing it to learn from. I don’t have to waste all that money, with experimentation, building technology, training drivers, and training the market how to order… they have done all that for me,” he told local media The Edge Weekly in an interview in March.

The group also introduced airasia beauty recently. This e-commerce offering allows the app’s users to purchase skincare, makeup, and bath and body supplements, and get the products delivered at home.

Meanwhile, the group has plans to list the logistics division as early as the second half of next year, its chief told DealStreetAsia in a recent interview. Ahead of the IPO, the company also plans to raise $50 million in a strategic round, Teleport CEO Pete Chareonwongsak said. Teleport provides air cargo, and door-to-door delivery, among other services.

Cindy Silviana contributed to this story

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.