Tech giant GoTo, which raised $1.1 billion through an IPO on the Indonesia Stock Exchange (IDX) in April, is planning to raise fresh capital from a new investor through a private placement of shares.
In a filing to the IDX on Friday, GoTo said it plans to issue 118.43 billion shares, representing a roughly 10% stake in the company, at an undecided price. Shares of the company closed at 304 rupiah apiece on Friday, which implies a 10% stake has a market value of 36 trillion rupiah ($2.45 billion).
GoTo is awaiting approval for the private placement at its shareholder meeting on June 28, 2022. The deal will be executed at least a year after getting shareholders’ approval.
Shareholders of non-multi voting shares (MVS) will increase to 93.69% of all shareholders after the private placement from 93.05% currently. MVS shareholders will reduce from 6.08% to 5.53%.
The new investor will hold a 9.09% stake in GoTo after the private placement and be classified as a non-MVS shareholder. Other non-MVS shareholders include GoTo Peopleserve Fund (9.03%), Softbank arm SVF GT Subco (Singapore) Pte. Ltd (8.71%), and Alibaba-backed Taobao China Limited (8.84%).
Google, Tencent, Telkomsel, and Astra International are also non-MVS shareholders with less than 5% stake each in GoTo.
MVS shares, which command more voting power, are held by the founders.
Funding from the private placement will be used for the working capital needs of GoTo and its subsidiaries, according to the IDX filing. GoTo has 14 direct entities and more than 60 indirect entities — around 39 entities operate in Southeast Asia (excluding Indonesia), India and the Cayman Islands, it said.
The new fundraising plans suggest that the $1.1 billion raised in the IPO is not enough.
In a statement to DealStreetAsia, a GoTo spokesperson said the private placement was mentioned in the company’s IPO prospectus, and it is being announced again as part of “an administrative practice”.
The private placement is a positive for GoTo’s stock as corporate actions always boost market sentiment, said Maximilianus Nico Demus, head of research at Pilarmas Sekuritas, to DealStreetAsia. GoTo’s shares, which started trading on IDX on April 11, have fallen 7.64% so far from their IPO price of 338 rupiah apiece.
“GoTo can use the fundraising to expand to new businesses and new countries,” Niko Margaronis, analyst at BRI Danareksa Sekuritas said.
GoTo’s business spans ride-hailing, e-commerce, and financial services. Besides Indonesia, its ride-hailing division Gojek has expanded to Singapore, Thailand, Philippines, and Vietnam.
GoTo posted a heavy loss of almost 12.3 trillion rupiah ($857.85 million) in the first nine months of 2021, but it is less than the 16.8 trillion ($1.17 billion) posted in the entire 2020, and 24.2 trillion rupiah ($1.68 billion) posted in the entire 2019.
GoTo will publish its 2021 and Q1 2022 earnings on May 30.
The Southeast Asian ride-hailing and food delivery company Grab’s loss narrowed by 35% to $435 million in Q1 2022 from $666 million a year earlier.
Meanwhile, Sea Ltd’s losses swelled by more than 37% in the first quarter of 2022 to $580.1 million, compared with $422.1 million a year earlier.
In November last year, Indonesian unicorn Bukalapak also raised nearly 4 trillion rupiah ($272.89 million) under an employee stock option programme (ESOP), three months after it listed on the IDX.