Indonesia’s ride-hailing major Gojek has raised $1.2 billion in fresh capital and increased its Series F round total to just under $3 billion, according to an internal memo sent by its co-CEOs on Tuesday.
The round was closed last week, said Andre Soelistyo and Kevin Aluwi in a joint memo. No investor names were disclosed.
The firm made the first close of its ongoing Series F round at $1 billion early last year and disclosed unspecified investments from Mitsubishi Motors Corporation, Mitsubishi Corporation, Mitsubishi UFJ Lease & Finance and payments major Visa in July.
The Gojek co-CEOs indicated the round is not closed yet.
“We’re not stopping there as we are still seeing strong demand among the investment community to partner with us. There are a number of exciting ongoing conversations that we will be able to update you on very soon,” they wrote in the memo.
We had last year reported that the ride-hailing and payments major was targeting to raise over $3 billion in its latest round of financing.
Gojek’s latest funding comes as Southeast Asia’s venture capital and startup industry braces itself for a harsh fundraising environment in 2020, made severe by the global coronavirus pandemic.
The public expose of WeWork’s accounting practices last year has also triggered deeper scrutiny over startup financials, several of which are under increasing pressure to reduce cash burn and show clear paths to profitability.
Gojek isn’t an exception here. In the memo, Soelistyo and Aluwi told employees that doing more with less is about to be “more important than ever” over the coming months.
“Good businesses like ours will always attract investment, but as the economic slowdown takes hold, the availability of that investment will be reduced, so we should focus every dollar where we think it will make the most impact and not take our resources for granted,” they said.
Gojek, which operates multiple businesses across ride-hailing, food delivery, logistics and others, has already been cutting back on some of its ancillary units such as laundry services and hairstyling. Gojek’s lifestyle division, Golife, has seen five of its seven services discontinued as of January 2020.
In February, media reports revealed that Gojek had entered early conversations with its arch-rival Grab for a merger, a sign of desperate times for both companies. Gojek publicly denounced any such engagements. Both companies are not known to share many investors on their cap tables, with the exception of Visa and Mitsubishi.
The fresh capital raised by Gojek brings the company within its target of $2.5-3 billion for this round, which suggests that it is well-capitalised for the time being. But it is still difficult to tell if this necessarily gives Gojek significantly higher bargaining power if a merger is truly on the cards. Both Grab and Gojek have largely kept mum when it comes to revenue performance, cash burn and acquisition costs.
Industry watchers, however, speculate that both companies are likely to attempt carving out certain sections of their business to work out a truce. For instance, Gojek could limit its operations to Indonesia, Southeast Asia’s largest market, and exit other countries in the region. Meanwhile, Grab could limit its Indonesia presence to the lucrative payments business.