Gojek-Tokopedia combine to focus on Indonesia as core market, says Northstar’s Walujo

Patrick Walujo, Founder and Managing Partner of Northstar Group

Indonesian app giant GoTo, which is set to be created through the proposed merger of unicorns Gojek and Tokopedia, is currently busy chalking out its next phase of business as it gears up to take on rival Shopee, owned by regional internet giant Sea, according to Gojek’s early investor.

Northstar Group founder and managing partner Patrick Walujo, who invested in Gojek in 2014, told DealStreetAsia that the merger of the two most valuable tech companies in the archipelago is bracing for a long, intense battle in the market that is so far dominated by Sea Group, followed by Tokopedia.

“At the end of the day, we do not see e-commerce in Southeast Asia as a winner-takes-all business. There should be space for two large and competitive players to thrive, like Indomaret and Alfamart in minimarts,” Walujo said.

According to an e-commerce study conducted by online shopping aggregator iPrice Group, Shopee registered an average monthly website visit of over 90 million in 2020, while for SoftBank-backed Tokopedia, it stood at over 80 million.

In terms of the e-wallet landscape too, ShopeePay outperformed its peers. This is even as ShopeePay was launched in January 2019, a few years after Gojek’s GoPay, OVO, and DANA hit the market.

A survey conducted by Neurosensum, which took into account the performance of e-wallet players from November 2020 to January 2021, stated how 68% of the participants living across eight cities in Jabodetabek, Java, and outside Java Island used ShopeePay, while 62% used OVO. Meanwhile, 54%, 53%, and 23% of the participants used GoPay, DANA, and LinkAja, respectively.

Going forward, Walujo expects GoTo to focus on Indonesia as its core market. This is even as Gojek in 2018 had plans to expand its operations in five countries namely Vietnam, Malaysia, Thailand, Singapore, and the Philippines.

So far, the company is doing well in Vietnam and Thailand apart from its home market, Indonesia. In others, however, it is faced with stiff competition from archrival Grab.

Post-merger framework

GoTo could be listed on the Indonesian stock exchange soon, said Walujo, even as he declined to divulge details.

The Goldman Sachs alumnus expects to see GoTo to be the third-largest market cap on the Indonesia stock exchange, after PT Bank Central Asia Tbk (Bank BCA) and PT Bank Rakyat Indonesia Tbk (Bank BRI). 

“If the rumor of valuation proves to be correct, the merged Gojek-Tokopedia business will be the third-largest by market capitalization on the Indonesia stock exchange. This will clearly demonstrate the potential of what young Indonesians can achieve,” Walujo said.

Late last month DealStreetAsia had reported that GoTo could attract a valuation of around $30-40 billion. While Gojek is independently valued at $10.5 billion, Tokopedia’s valuation stands at $7.5 billion.

Since the launch of the app in 2015, Gojek has raised over $5 billion in funding from other top investors including Alphabet Inc’s Google, Facebook, PayPal, Tencent, and Visa, among others. Meanwhile, e-commerce giant Tokopedia has garnered around $2.8 billion from Alibaba Group, SoftBank, Google, Sequoia Capital India, and many more.

Walujo’s early investment days in Gojek

Walujo reminisced how he lent Gojek co-founder Nadiem Makarim $800,000 in his personal capacity in 2014 even before the company launched its application with only four services – GoRide, GoSend, GoShop, and GoFood.

Walujo is the son-in-law of Theodore Permadi Rachmat, a former CEO of Indonesian conglomerate PT Astra International Tbk. Through Northstar, he had invested in Kartuku, an end-to-end electronic payment provider. Makarim worked in Kartuku as a Chief Innovation Officer back in 2013. At that time, Makarim had operated Gojek as a call centre for helping customers deliver goods through ojek (ride-hailing) drivers. Yet, it was a small project in a narrow space.

Walujo then had a chance to meet Travis Kalanick, co-founder and former CEO of Uber Technologies. Kalanick told him of Uber’s plan to enter the Indonesian market. Walujo then asked Makarim whether Gojek could have a similar business like Uber, but using motorbikes. Makarim was thinking along the same lines but did not have the capital to do so. That was when Walujo decided to invest in Gojek in 2014.

The same year, the startup saw the participation of NSI Ventures, Northstar’s early-stage venture capital arm that now operates as an independent entity as Openspace Ventures.

For Northstar, which pumped in the capital in Gojek through its fourth fund in 2015, its relationship with the startup goes beyond that of an investor with its investee, Walujo says.

He represented Gojek in 2016 in front of the government where he discussed the issue of a raging price war in the country’s transportation sector that also has players such as Grab and Uber.

And, at least two of Northstar’s executives have also moved to Gojek over the past few years. Case in point: Andre Soelistyo, who currently serves as the co-CEO of the company. He was earlier the executive director of Northstar Group between 2008 and 2016.

Going forward, Soelistyo is expected to head GoTo, which will house three business units under one umbrella – ride-hailing provider Gojek; e-commerce arm Tokopedia; and payment and financial services under GoPay (Dompet Karya Anak Bangsa).

Similarly, Jonathan Barki, who is now the head of corporate strategy at Gojek, was earlier with Northstar Group.

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.