Gojek, Tokopedia said to be finalising terms of mega merger ahead of a dual listing

Severan Rault, Gojek CTO

Indonesia’s two most valuable startups, ride-hailing giant Gojek and e-commerce provider PT Tokopedia, are finalizing terms for their merger and aiming to reach an agreement as early as this month, according to people familiar with the matter.

The two companies are discussing a variety of scenarios with the goal of ultimately listing the combined entity in both Jakarta and the US, said the people, asking not to be identified because the negotiations are private. The target valuation in the public markets is between $35 billion and $40 billion, one of the people said.

Representatives of Gojek and Tokopedia declined to comment.

The two startups plan to create an Indonesia internet powerhouse, at the leading edge of businesses from ride-hailing and digital payments to online shopping and delivery. Bloomberg News first reported their merger talks in January.

The latest terms under discussion call for Gojek shareholders to own about 60% of the combined entity while Tokopedia’s investors hold 40%, said the people. Regardless of the ratio, both companies are approaching the transaction as a merger of equals, they said.

One of the scenarios being discussed is to combine the two companies before concurrently listing them in Indonesia and the US, one of the people said. Another scenario is to list Tokopedia in Jakarta first, then merge with Gojek before a listing of the combined entity in the U.S. The companies have yet to decide whether they’d opt to list in the U.S. via a traditional initial public offering or a special purpose acquisition company.

The talks are ongoing and it’s possible they take longer or fail to lead to a final agreement.

Gojek had been in discussions with ride-hailing rival Grab Holdings Inc. about a possible merger, but those talks dragged on and ultimately collapsed. Among other issues, that deal would likely have faced regulatory opposition since it would combine the two major providers of on-demand rides and delivery services in several Southeast Asian markets.

SoftBank Group Corp. founder Masayoshi Son, the biggest outside shareholder in Grab, had originally encouraged Grab Chief Executive Officer Anthony Tan to work out a deal with Gojek. But Son has since shifted his support to a Gojek-Tokopedia alliance.

The two Indonesian tech pioneers have common investors, including Google, Temasek Holdings Pte and Sequoia Capital India. Their founders have also been friends since their inception more than 10 years ago.

If the combined Gojek-Tokopedia proceeds with an IPO, it would give global investors another opportunity to bet on one of the world’s fastest-growing internet economies. Shares of Sea Ltd., the only major Southeast Asian internet company listed in the U.S., climbed almost 400% last year, boosted by the growing popularity of its mobile gaming and online shopping platform.

Tokopedia is also backed by Alibaba Group Holding Ltd., which has its own e-commerce unit in the region, Lazada.

Grab has since picked banks for a potential U.S. IPO that could raise at least $2 billion, people familiar with the matter have said.

Bloomberg

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.