Indonesian ride-hailing major Gojek is open to spinning off certain business arms and may look at raising funding for these verticals separately as it attempts to extend its offerings across Southeast Asia, its president Andre Soelistyo said.
“… there will be a point in time where certain verticals may need to have their own sets of shareholders and governance as the business models get much more regulatory-related, or having a bigger ecosystem outside of our own platform,” he said during a fireside chat at our Asia PE-VC Summit 2019 held recently in Singapore.
Gojek, which started off offering solely ride-hailing services in Indonesia, now calls itself a user-focused super-app, boasting numerous features such as food delivery, payment, lending, medical, entertainment, e-commerce, on its platform which aims to “remove daily friction” for its user.
Soelistyo explained that, for the moment, it is important for Gojek to have “100 per cent ownership and control” on its various different business lines (or product groups as Gojek calls it) in order to maintain synergy to achieve group-level objectives. However, the idea of spinning off one of the more successful business arms is something Gojek will “never say never to”, he added.
According to Soelistyo, spinning off the group’s payments arm, in particular, may make the most sense, as such a business would benefit from having a bigger ecosystem. Such a move has also been proven successful by other global tech giants like eBay, which spun off PayPal, and Alibaba which took the same route with Ant Financial.
Interestingly, Gojek’s competitor Grab is reportedly in discussions with Ant Financial on spinning out Grab Financial Group.
For Gojek itself, payments is currently its largest vertical, Soelistyo confirmed. This is driven by the size of the opportunity in the industry where the number of people that transact with cash in still very large.
However, another vertical that has commanded attention and resource from Gojek is food delivery. The business offers not only a huge market for Gojek but also the highest potential of monetization.
“That’s why food has been our main focus. The size of the food business today is almost 2x of transport, because of the growth that we’ve seen. And I think that we’ve cracked the model but we want to go deeper into building larger and larger product features,” he said.