Indonesian ride-hailing unicorn GOJEK has hired Citigroup Inc’s investment banking unit to work on its extended Series F funding round, according to industry executives aware of the development.
Bloomberg had earlier reported that GOJEK was seeking pitches from investment banks to work on its financing round. The Indonesian unicorn has already raised just over $1 billion as part of the round from investors including Mitsubishi Corp. and Provident Capital, along with Google, JD.com and Tencent Holdings Ltd.
Citi will be looking to help the Jakarta-based company raise an additional $2 billion, which, according to executives DEALSTREETASIA spoke to, is likely to comprise a mix of equity and debt funding.
Low interest rates have made debt funding increasingly popular among Southeast Asian startups. NYSE-listed Sea Ltd had in 2018 raised $575 million via an upsized convertible bonds offering to finance its expansion. Last year, GOJEK’s archrival Grab secured significant funding from automakers, including $1 billion from Toyota, in deals that looked a little like vendor financing.
According to industry sources, Citi’s mandate also includes roping in strategic investors interested in one or more of GOJEK’s about 20 business verticals — these include food and grocery delivery, payments, courier, car wash, massage and house cleaning services. In the past, GOJEK has secured investments from strategics such as Allianz via its venture arm and then roped in the insurer to provide insurance cover for its drivers.
When contacted by DEALSTREETASIA, GOJEK declined to comment on its fundraising or the appointment of an investment bank.
According to a previously issued official statement, the Indonesian ride-hailing to payments startup will invest the Series F funds across transport, food delivery, logistics, mobile payments, and merchant services businesses. It also plans to use proceeds to accelerate its market expansion across Southeast Asia, a market which has been dominated by the heavily-funded Grab.
In the last five months, GOJEK has expanded into three new regional markets, namely Vietnam, Singapore and Thailand.
The company is in longstanding talks with the Philippine authority to make the country its fourth overseas market. Its planned foray into the Philippines hit a roadblock in January due to foreign ownership regulations. The company said it is working to resolve those regulatory concerns.
“International expansion is definitely still new to us. There will inevitably be hiccups in all shapes and forms. The Philippines is a very important market for us and we’re working very closely with government agencies to figure out the right solution, and it’s still an ongoing conversation,” GOJEK co-founder Kevin Aluwi had said in a fireside chat at DEALSTREETASIA’s Indonesia PE-VC Summit 2019 in January.
Grab, meanwhile, has secured over $3 billion in investment towards its ongoing Series H funding round, for which it is seeking to raise a total of $5 billion. The round has been backed by investors that include Toyota, Microsoft, Booking Holdings, Hyundai, OppenheimerFunds, Ping An Capital, Mirae Asset-Naver Asia Growth Fund, Lightspeed Venture Partners, Macquarie Capital, Goldman Sachs Investment Partners and Citi Ventures.