GoTo Group, an entity formed after the merger of Indonesian unicorns Gojek and Tokopedia, will boost its stake in local retailer Matahari Putra Prima (MPPA), according to a stock exchange filing on Tuesday.
MPPA operates supermarket brands Hypermart, which has a network of over 200 stores across 72 cities in Indonesia, and Foodmart.
Local conglomerate Lippo Group’s investment arm Multipolar will also top up its investment in MPPA, the retailer said in a filing with the Indonesia Stock Exchange (IDX). Multipolar owned a 38.33% stake in MPPA as of August 31, per IDX data.
GoTo and Multipolar will participate in a rights issue that MPPA aims to conclude in the fourth quarter this year. The retailer did not disclose how much it is seeking to raise.
MPPA said it plans to use the capital to increase its market share, strengthen its balance sheet and boost its omnichannel retail strategy. It holds a 25% market share in the supermarket and hypermarket category, per NielsenIQ research data.
MPPA’s stock dipped nearly 6.6% to 925 rupiah at the end of trading hours on Tuesday.
DealStreetAsia had on Monday reported that GoTo Group has increased its stakes in Multipolar and MPPA through stock market transactions.
According to sources privy to the matter, GoTo Group invested nearly $50 million in both entities to acquire a 4.8% stake in Multipolar and a 6.7% stake in MPPA.
Gojek invested in MPPA through PT Pradipa Darpa Bangsa. The ride-hailing company had earlier bought 4.76% of MPPA shares worth more than $10 million from Multipolar in May.
As part of a two-way transaction, Lippo Group is also understood to be looking to invest a significant amount in GoTo’s pre-IPO round. One market source said the group could invest a large double-digit amount—the investment could be close to $100 million—in the round.
GoTo is in talks to raise $1.5 billion to $2 billion in a pre-IPO round that has already been oversubscribed. GoTo’s purchase of stakes in Lippo Group’s entities and the latter’s proposed participation in the former’s pre-IPO round are seen as a larger move to further cement the ties between the two entities.
John Riady, president director at Lippo Karawaci, had pointed out the significance of partnerships with tech majors to unlock the potential of traditional companies.
“I’m a believer that so-called offline companies have a lot of value add and will continue to grow. In a market like Indonesia, offline retail is still 30% of the total retail market,” Riady said, speaking at DealStreetAsia’s Asia PE-VC Summit 2021.
Riady’s family controls the Lippo Group.