Exclusive: Go-Jek, Grab, Traveloka & Emtek in race to buy digital payments firm worth $20m

Photo: Fusion Payments website

Southeast Asian unicorns Go-Jek, Grab, and Traveloka, along with media conglomerate Emtek, are bidding to purchase digital payments firm Fusion Payments for about $20 million, this portal has learnt.

Update: Go-Jek, however, has denied that there have been any discussions with Fusion Payments.

“GO-JEK is not in contacts nor have had any interactions with the digital payments firm,” the company said in a statement sent to DEALSTREETASIA.

Nevertheless, all said bidders are among the most active fundraisers in the region. Traveloka has recently received $500 million from Expedia and other investors, while Go-Jek is reportedly raising $1 billion from existing and new investors, including Chinese giants Tencent and JD.com. Meanwhile, Grab is targeting to raise a total of $2.5 billion.

Due diligence for Fusion Payments is underway, and a deal is expected to be reached soon.

DEALSTREETASIA learnt that the bidders are particularly interested in the startup’s partnership with XL and Indosat – two of Indonesia’s largest mobile data providers – as well as its range of payment services, technical solutions and relationship with enterprises.

Originally operating from Australia, Fusion Payments migrated its business to Indonesia about five years ago. Its platform Beruang.co.id allows users to pay their bills from a variety of sources including mobile wallets, prepaid, debit, and credit cards. The company formed a complete integrated platform for banking, payment, and authentication on all mobile and PC channels.

Fusion Payments had been in advanced talks with several potential investors, including Temasek, to raise $40 million worth of capital. The plan was dropped after investor feedback indicated that there was already too high concentration in the payment vertical, especially those at the series B stage.

“At the moment, we feel strongly that from a technical and user experience point-of-view, we are far ahead of many others, but these larger companies (Go-Jek, Grab, Traveloka, etc.) will always have deeper pockets and they’re going to catch up with us very soon. Shareholders, therefore, finally decided to sell the company,” said a Fusion Payments executive, on the condition of anonymity.

The company started fundraising in April, and had approached the same bidders for capital.

While Fusion Payments targets the banked – people who already own debit and credit cards – its potential buyers Go-Jek and Grab have explicitly expressed an intention to focus on the unbanked, or those who still rely heavily on cash in transactions.

“(The unbanked) is still their main focus, but there’s a recognition that in their customer base, there are also affluent Indonesians. Even if you build a large platform for the wider country, you can’t be blind to the fact that with fewer (affluent) people, you can make the same amount of money,” the executive explained.

Battle for payments

Grab and Go-Jek, two of Southeast Asia’s most well-funded ride-hailing firms, are fiercely competing for market share in Indonesia. A report co-authored by Google last year revealed that Indonesia, home to nearly 260 million people, might account for “more than half of the revenue” of ride-sharing services across the region by 2025.

With Grab unable to expand outside of SEA and become a supra-regional player – with India and China representing intensive competitive markets and Uber dominating North America and Europe – Indonesia becomes a key market for the firm. Early this year, Grab acquired Indonesia payments startup Kudo that allows those without a credit card or bank account to make purchases online.

Chinese firms’ increasing presence in the country through local firms has also been heating up the battleground. Tencent’s JD.com recently announced to participate in Traveloka’s $500 million funding round, followed by Alibaba Group leading a $1.1 billion round into Tokopedia. The latter has also formed a joint venture with Emtek to develop digital payments.

Emtek recently revealed that it has made a minority investment in ride-hailing app Grab Inc even as it injected Rp 344 billion ($25.8 million) into “several VC firms” during the first half of 2017.

Emtek has been regarded as a prolific investor having injected funds both directly and indirectly into smaller firms and tech startups – including Kudo, which was acquired by Grab Indonesia for $100 million.

Also Read:

Indonesia: Alibaba leads $1.1b round in e-commerce major Tokopedia

China’s JD.com invests $100m in Indonesia’s Go-Jek amid SE Asia push

Digital health & education untapped in Indonesia: Daren Tan, Golden Equator Capital

Singapore: Grab secures strategic investment from Toyota Tsusho

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.