Indonesia’s biggest tech group GoTo has decided to extend the closing of its pre-IPO round as it first seeks to finalise payment startup OVO’s divestment from e-commerce platform Tokopedia, sources privy to the development told DealStreetAsia.
GoTo, formed through the merger of ride-hailing giant Gojek and Tokopedia in May, is understood to be in talks to raise about $2 billion in its pre-IPO round that has “already been oversubscribed threefold,” said one of the persons mentioned above.
“They (GoTo) haven’t closed the funding yet as they first look to finalise the divestment of OVO to Grab and Emtek Group… OVO divestment is important. If not done, GoTo can’t launch its IPO going forward,” the person added.
GoTo’s pre-IPO round is now expected to be closed over the next few weeks.
The divestment process between OVO’s shareholders and Emtek Group is understood to have reached an agreement and is slated to be announced shortly. After the proposed transaction, Gopay, Gojek’s digital wallet, is set to come into Tokopedia’s ecosystem as its main e-wallet.
While Tokopedia and Gojek spokespersons declined to comment on the development, an email sent to Emtek did not elicit any response.
Tokopedia, Grab, and Lippo Group are amongst OVO’s prominent shareholders. While Tokopedia holds a 36.1% stake in OVO’s parent company PT Bumi Cakrawala Perkasa (BCP) through its wholly-owned subsidiary Digital Investindo Jaya, Singapore-based Grab is its biggest shareholder holding 39.2% stake. Lippo Group, meanwhile, holds a 7.2% stake in BCP through two of its subsidiaries PT Inti Anugrah Pratama and PT Prima Ecommerce Global. Among other shareholders, Tokyo Century Corporation owns 7.5% in BCP, while PT Wahana Inovasi Lestari (owned by Tokopedia owners Leontinus Alpha Edison and William Tanuwijaya) owns another 5% in BCP.
Indonesia’s central bank recently barred any entity from holding a controlling stake in more than one digital wallet in the country. It also capped foreign investment (based on ultimate beneficial ownership of shares) in payments firms at 85% and put a 49% ceiling on the voting power of foreign shareholders in such companies.
Reuters first reported that GoTo will delay its IPO in 2022 – the company is looking at a dual-listing, starting in Indonesia’s stock exchange and then in the US.
“This is a year of big exits. And in a year of big exits, you’re competing with other attractive exit opportunities for the same resource,” a technology lawyer at global law firm Withers Joel Shen had earlier said, commenting on the timing of GoTo’s IPO.
Action has been hotting up on Indonesia’s bourse with more retail investors willing to park their money in the country’s listed assets. Indonesia’s Financial Services Authority (OJK) recorded a 56.95% jump so far this year in terms of the addition of retail investors.
E-commerce behemoth Bukalapak raised $1.5 billion in Indonesia’s biggest IPO last month, five times more than the original target of $300 million. Bukalapak shares closed at 1,060 rupiah on its debut day, touching the bourse’s 25% limit but now the shares traded at 0.6% below its IPO price of 850 rupiah.