Go-Jek acquires three fintech firms as battle for payments heats up

Nadiem Makarim, chief executive officer of PT Go-Jek Indonesia, sits for a photograph an interview in Singapore, on Tuesday, Nov. 29, 2016. Photographer: Ore Huiying/Bloomberg via Getty Images

Go-Jek, Indonesia’s largest ride-hailing service, Friday said it had reached deals to acquire three local fintech companies to further beef up its formidable payments arm as it aims to consolidate its position as the dominant player in the country’s digital payments space.

Go-Jek said it had acquired the country’s leading offline payments processing company Kartuku, top online payment gateway Midtrans, and local community group-based saving and lending network Mapan, even as it added that collectively, the three companies and GoPay processed close to $5 billion of debit card, credit card and digital wallet transactions for its users, service providers and merchants.

DEALSTREETASIA had first reported last month that the Indonesian ride-hailing major had acquired Kartuku while adding that the deal size was estimated to be upwards of $50 million. This portal’s report, citing sources, had said that the Kartuku deal was a mix of cash and equity.

Last month, this portal had also reported that Go-Jek was eyeing Midtrans while adding that industry observers had estimated the value of the deal at over $100 million.

Go-Jek did not reveal the value of the acquisitions. But, big picture, the combined deals marks the largest exit in Indonesia’s nascent startup ecosystem so far.

“We are very excited to welcome Kartuku, Midtrans, and Mapan into the Go-Jek family. We have collaborated with them and followed their progress for a number of years and are looking forward to working together on a shared mission to stimulate economic growth and improve lives through increased financial inclusion in Indonesia,” Nadiem Makarim, Founder and CEO of GO-JEK Group, said in a statement. 

The ride-hailing major that is backed by the likes of KKR & Co., Warburg Pincus and Tencent Holdings Ltd., also said that the chief executives of each of the three acquired businesses would take senior management positions in the group – Aldi Haryopratomo of Mapan will lead GO-PAY,  and Ryu Suliawan of Midtrans oversee the the group’s merchant platform while Thomas Husted of Kartuku will become Go-Jek’s Group CFO.

Go-Jek had reportedly bid for an Australian payment firm called Fusion Payments, but decided to pull out. Fusion Payments targeted the banked – people who already own debit and credit cards – while Go-Jek was looking to focus on the unbanked, or those who still heavily rely on cash in transactions.

Earlier this year, Go-Jek’s largest rival in the region – Singapore headquartered Grab – had acquired Indonesian payment startup Kudo to augment its mobile payments platform in Southeast Asia’s largest economy.

These deals will add formidable firepower to Go-Jek, that is already the leading mobile-based consumer transactional platform in the country with 15 million weekly active users, in its battle with competitors such as Grab and Uber.

Go-Jek currently claims to be the dominant player across several segments in the consumer internet space in Indonesia, and the numbers back its stance. It is by far the largest ride-hailing, food delivery and instant logistics business and leading digital wallet provider, with 900,000 drivers, more than 125,000 merchants and over 100 million transactions processed through its platform per month.

“2018 will be the year that GO-PAY moves beyond the GO-JEK ecosystem, providing convenient, secure and reliable payments both offline and online,” said Andre Soelistyo, Go-Jek Group president.

“The acquisitions will immediately accelerate the acceptance and market leadership of GO-PAY in the offline space through Kartuku as well as the online space through Midtrans, while also increasing financial inclusion for the unbanked through Mapan. This approach to finance, implemented by leading home-grown Indonesian technology businesses within GO-JEK Group, will accelerate financial inclusion for millions of Indonesians and stimulate economic productivity throughout the country. When the acquisitions are finalised, the management teams and employees will continue to operate as before, but will benefit from synergies as part of the Group,” he added.

The Grab-Go-Jek slugfest in Indonesia

 

Grab stepped up its battle in the payments space with Go-Jek in Southeast Asia’s largest economy by acquiring an Indonesian O2O e-commerce and payment startup, Kudo, for $100 million.

“We already have so many plans for 2018, and most of them will focus on financial inclusion,” Ridzki Kramadibrata, Grab country manager for Indonesia, told this portal recently.

This week, Grab announced a partnership with mobile payment and transaction app PayTren, tapping into its network of 1.7 million registered partners across Indonesia. The move allows Grab to recruit drivers through the PayTren app, which will be integrated with Kudo platform.

To compete with its rival Go-Jek, Grab announced a commitment to invest $700 million in Indonesia in a programme called ‘Grab 4 Indonesia’ 2020 Masterplan. For Phase 1 of this plan, Grab opened an R&D centre in Kebayoran Baru in Jakarta and has committed to investing in local payments startups. In May, Grab launched Phase 2 of ‘Grab 4 Indonesia’ and said it was committed to helping 5 million micro-entrepreneurs.

 

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.