CEOs of Gojek and Grab, two of Southeast Asia’s most valued tech companies, are rallying their teams following fresh reports of an imminent deal between the two tech giants.
In an internal note seen by DealStreetAsia on Thursday, Gojek co-CEO Kevin Aluwi and Andre Soelistyo urged the company’s employees to “ignore the noise” and assured that the company is in a strong position to make its own decision based on what is best for the company.
Earlier on Thursday, Grab co-founder and CEO Anthony Tan, in an internal memo seen by Reuters, told employees that he acknowledged the reports and added that the firm is “in a position to make acquisitions.”
“Our business momentum is good, and as with any market consolidation rumours, we are the ones in a position to acquire,” Tan said.
“Even in a tough year like 2020, we are profitable before overheads (PBO), hit 100% recovery, become #1 in food delivery by revenue in Indonesia (even though our competitor had a headstart by a few years),” the Grab co-founder’s note to his team said.
We had reported on December 2, based on information from sources aware of the deal developments, that Grab and Gojek have agreed in principle to merge their operations and are currently ironing out the fine print.
According to one of our sources, Grab has offered Gojek a 30 per cent stake in the merged entity. Gojek and its shareholders, however, are pushing for a larger stake on account of the company’s extensive presence in Indonesia, which is Southeast Asia’s largest market.
Gojek’s internal note on Thursday marks the second time this year that it has called the wide-spread reports about a merger with rival Grab “inaccurate.”
In their latest internal note, Gojek leaders told employees that the decacorn was “very well capitalized” and had “enough runway” to continue to operate and grow the business. “As such, there is no pressing reason for us to make the sort of deal being referred to in the media,” the statement reads.
“Our investor list is the envy of every other pre-IPO company in the world, with Google, Tencent, Facebook, Paypal, and many others continuing to throw their weight behind us,” Gojek’s co-CEOs said, adding that the company’s business performance has been “amazing” despite the challenges of 2020.
“We are in a very healthy financial condition because unlike many other businesses in our sector, we have focused on driving growth through product and service leadership rather than being overly dependent on cash burn,” the CEOs said.
Grab is now valued at over $15 billion while Gojek’s worth has been estimated at $10 billion.
Earlier this month, Gojek in a statement had said it had seen “stable topline growth” despite the COVID-19 crisis, clocking a 10 per cent year-on-year increase in gross transaction value (GTV) to $12 billion this year. Indonesia’s most valuable internet startup also added that its Gojek-branded services were generating positive margins on a product basis.
The group also claimed its food merchant ecosystem had witnessed an 80 per cent increase with around 900,000 registered food merchants using Gojek’s platform and services, compared with 500,000 last year.