Indonesia’s e-commerce unicorn Tokopedia defended its merger plan with ride-hailing and financial technology company Gojek in a rare hearing at the country’s parliament on Wednesday.
The idea behind what would be the biggest business deal in Indonesian history came from both Tokopedia and Gojek founders with an aim to compete with other global players, Tokopedia founder and chief executive William Tanuwijaya said.
Tokopedia and Gojek, Indonesia’s two most valuable tech companies, announced their merger plan in May to create tech powerhouse GoTo Group.
Tanuwijaya said the merger was never intended to control the domestic market and that people still have abundant choices for similar services offered by both Tokopedia and Gojek.
“Tokopedia and Gojek merger is not a consolidation because, in our industry, similar companies merge to consolidate the market,” Tanuwijaya told the lawmakers who oversee trade and industry.
“Gojek is in the transportation business, food, and payment system and Tokopedia is in marketplace business… This would be a global powerhouse,” he said, noting that the merger was not orchestrated by the companies’ investors.
Tokopedia has garnered around $2.8 billion from Alibaba Group, SoftBank, Google, Sequoia Capital India, among others, while Gojek has raised over $5 billion in funding from top investors including Google, Facebook, PayPal, Tencent, and Visa.
GoTo claimed to have transactions worth about 2% of Indonesian GDP within its platform.
“When combined, we can accelerate, not laying off people but instead absorbing more workforce. That is the story behind the merger,” he said.
Tanuwijawa’s comment came after a lawmaker expressed his concern against the merger.
Reuters first reported Indonesia’s anti-trust agency’s (KPPU) plans to scrutinise the merger to check for potential monopolistic behaviour. Guntur Saragih, a KPPU commissioner, told DealStreetAsia the agency received the merger notification on August 9 but it is still assessing the implications of the deal.
The hearing was also attended in person by Bukalapak CEO Rachmat Kaimuddin and Shopee Indonesia executive director Christin Djuarto. Gojek CEO and co-founder Kevin Aluwi joined the hearing through video call.