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  • Grab and GoTo Yield to Pressure: Slash Driver Commissions in Indonesia

    Grab and GoTo Yield to Pressure: Slash Driver Commissions in Indonesia

    Indonesia’s GoTo, a ride-hailing and food delivery company, alongside Singapore-based Grab, announced they will reduce the per-trip commissions for their two-wheeled driver partners in Indonesia. Beginning July 1, the commission rate will be slashed from 20% to 8%.

    Implementation of Reduced Commissions

    Indonesia’s President, Prabowo Subianto, first brought up the idea of an 8% cap on commissions in his speech on May 1. However, he did not provide details regarding when this initiative would be implemented.

    GoTo’s VP Director, Catherine Hindra Sutjahyo, expressed the company’s support for the initiative at a press conference. “We support the efforts to continue increasing the prosperity of the drivers,” she stated.

    Neneng Goenadi, Grab Indonesia’s CEO, echoed Sutjahyo’s sentiments. Both leaders confirmed that their respective companies will start applying the new 8% commission rate from July 1.

    Impact on Ride-Hailing Platforms

    This development was first reported in January, with concerns raised about its potential effect on the profitability of ride-hailing platforms, particularly in Southeast Asia, which serves as their largest market.

    Cucun Ahmad Syamsurijal, the Deputy Parliament Speaker, lauded the reduced commissions as a testament to President Prabowo’s administration’s commitment to supporting all ride-hailing drivers in the country.

    Questions & Answers

    **What is the new commission rate for two-wheeled drivers for GoTo and Grab in Indonesia?**
    The new commission rate is 8%, reduced from the previous rate of 20%.

    **When will the new commission rate take effect?**
    The new commission rate will be implemented starting July 1.

    **What potential impact could this reduction have on ride-hailing platforms?**
    The reduction could potentially affect the profitability of ride-hailing platforms, particularly in Southeast Asia, their largest market.

  • Indonesia’s GoTo narrows losses and on track

    Indonesia’s GoTo narrows losses and on track

    Indonesia’s biggest tech firm GoTo on Tuesday said it had slashed underlying losses in the second quarter to US$78.25 million, down from $280 billion a year earlier, helped by intense cost-cutting measures.

    GoTo, backed by Japan’s SoftBank Group and Singapore’s sovereign wealth fund GIC, has implemented various cost-cutting measures including layoffs this year, as it lost three-quarters of its market valuation since it went public in April last year.

    Group CEO Patrick Walujo said that GoTo, which offers ride-hailing, e-commerce, and financial services, will continue its “cost discipline” measures while expanding its customer base.

    “We are developing a long-term strategy for achieving this, and in the meantime we will continue to operate with absolute cost discipline as we pivot our product mix towards the mass market,” Walujo, who took the top job in June, said in a statement.

    The company kept its target to swing to a profit by the end of this year.

    Following positive results for the first half, GoTo revised its 2023 adjusted EBITDA outlook to a loss of between $293.8 billion and $248.1 billion, from a previously forecast loss of between $346 billion and $300.3 billion.

    Net revenues for the second quarter of 2023 rose to $236 million, up 86.7 percent from 2022, with the company’s overall gross transaction value reaching $9.3 trillion, it said.

    The company said it had slashed losses by 48 percent for the first half compared to a year earlier.

    Its e-commerce business Tokopedia was Indonesia’s second-largest online marketplace last year, according to industry data, but faces intensifying competition as smaller rivals, led by TikTok, doubles down in the Southeast Asia’s biggest economy.

    Shares in GoTo, shorthand for GoTo Gojek Tokopedia, closed up 6.59 percent to $0.0067 per share before the earnings announcement.

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  • Grab Aims for Strategic Acquisition of Indonesia’s GoTo by Q2

    Grab Aims for Strategic Acquisition of Indonesia’s GoTo by Q2

    Grab is stepping into the spotlight with plans to acquire GoTo, Indonesia’s dynamic tech giant, in a deal tantalizingly pegged around $7 billion. According to sources, the Singaporean-based company has enlisted advisors to navigate the intricacies of this potentially groundbreaking merger, with financial discussions currently underway with top banks. Both companies, however, have opted for silence amidst the buzz surrounding this significant transaction.

    The market response to GoTo has been notably positive, as its shares surged 20% year-to-date, bringing the company’s market value to approximately $5.8 billion. Meanwhile, Grab, which trades on Nasdaq, is enjoying a recent uptick, with shares climbing 2.4%, resulting in a valuation nearing $20 billion.

    As part of the deal, GoTo plans to divest its international operations in Singapore to Grab, while also transferring its entire Indonesian business to Grab, excluding its finance division. Such a strategic move may reinforce Grab’s position in a competitive landscape.

    Analyst Niko Margaronis from BRI Danareksa Sekuritas, who keeps a close eye on GoTo, hinted that the Indonesian government might take a more lenient stance on this proposed merger. He suggests that regulators could consider the positive implications of strengthening key players, ultimately aiming for long-term economic growth.

    However, potential antitrust concerns loom large against the backdrop of rising living costs stirred by an unpredictable global economy. A recent case that looms in the collective memory was Uber’s aborted $950 million bid for Delivery Hero’s Foodpanda in Taiwan last March, a move quashed by regulatory fears over anti-competitive practices.

    As the market prepares for what could be a transformative shift in the tech landscape of Southeast Asia, all eyes remain fixed on Grab and GoTo. What other surprises might be lurking around the corner?

    Questions & Answers

    **What is Grab looking to acquire from GoTo?**
    Grab is interested in acquiring GoTo’s international unit in Singapore along with its Indonesian operations, excluding its finance arm, for around $7 billion.

    How have GoTo’s shares performed this year?
    GoTo’s shares have risen approximately 20% year-to-date, boosting its market value to about $5.8 billion.

    What might affect the approval of this merger?
    Potential antitrust scrutiny could play a significant role, especially amid increasing concerns over living costs and the impact of market consolidation.

  • GoTo posts first full-year underlying profit

    GoTo posts first full-year underlying profit

    Indonesia’s biggest tech firm PT GoTo Gojek Tokopedia forecast a sharp increase in its underlying earnings for 2025 on Wednesday, and also posted its first ever full-year underlying profit.

    GoTo, which offers ride hailing, food deliveries, logistics and financial services, also forecast a surge in its core earnings, or adjusted EBITDA, the company’s key measure of profitability.

    “We saw a significant increase in our user numbers throughout the year and expect this to continue into 2025,” said Patrick Walujo, GoTo Group CEO.

    The tech firm now expects its adjusted EBITDA for 2025 to be in the range of 1.4 trillion rupiah (US$85.16 million) to 1.6 trillion rupiah.

    It’s a significant increase from GoTo’s underlying profit of 327 billion rupiah for 2024, swinging from a loss of 3.670 trillion rupiah last year.

    The firm’s financial technology segment, whose earnings jumped 70 per cent last year, is expected to expand further in 2025 as the user base for its GoPay app and its loan book grows, the company said.

    GoTo, which is backed by Japan’s SoftBank Group and Singapore’s sovereign wealth fund GIC, had reportedly been involved in merger talks with Southeast Asian ride-hailing and food delivery company Grab.

    But GoTo said in a filing last month it had not engaged in talks regarding a potential merger with any party, noting media reports involving Grab.

    In an interview with the Financial Times, GoTo CEO Walujo expressed openness to a potential deal.

    “I will always be open to anything that is enhancing our shareholders’ return . . . in the long term,” Walujo said.

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  • GoTo, TikTok will be wholly compliant with Indonesia’s trade regulation

    GoTo, TikTok will be wholly compliant with Indonesia’s trade regulation

    Indonesian tech firm GoTo and Chinese-owned partner TikTok will be wholly compliant in a month and a half with the Southeast Asian nation’s regulation that bans in-app transactions on social media, GoTo’s CEO said on Wednesday.

    Short video app TikTok acquired in December majority shares in GoTo’s e-commerce unit Tokopedia after the Indonesian trade ministry banned transactions on its TikTok Shop e-commerce unit.

    “Integration process is going well. All parties continue to communicate with the related ministries and as far as we know the process is nearing completion,” CEO Patrick Walujo said in an online briefing.

    Indonesian minister for small and medium enterprises Teten Masduki said last week TikTok had yet to comply with the regulation.

    TikTok, owned by Chinese company ByteDance, did not immediately respond to a request for comment. Following December’s deal, TikTok has reopened its e-commerce services, which are now facilitated by Tokopedia.

    GoTo’s management said in the briefing that it will receive a quarterly e-commerce fee from Tokopedia, with the sum being dependent on Tokopedia’s gross merchandise value.

    Based on a GMV of $2.9 billion recorded in the third quarter of last year, the e-commerce service fee for GoTo will be $11.4 million, GoTo said.

    GoTo also expects its partnership with TikTok will benefit not only its e-commerce business but also its financial services segment as it will be able to offer digital payments and “buy now, pay later” credit schemes on TikTok.

  • Indonesia’s GoTo posts $201.9 million quarterly loss

    Indonesia’s GoTo posts $201.9 million quarterly loss

    Indonesia’s biggest tech firm PT GoTo Gojek Tokopedia Tbk posted a narrower adjusted EBITDA loss for the fourth quarter of 2022 of 3.1 trillion rupiah ($201.89 million), the firm said on Monday.

    GoTo posted 6.5 trillion rupiah in adjusted EBITDA (earnings before interest, tax, depreciation, amortisation and rent) loss in the same period of 2021.

    Its group CEO Andre Soelistyo said the results showed the company was making progress towards profitability through its cost-cutting measures, such as reducing incentives and marketing spending.

    “Although we expect growth to moderate in the short term, we will continue to focus on building the foundational product infrastructure that will drive sustainable, profitable growth over the long term,” he said in the statement.

    GoTo said its growth of gross transaction value in the next quarters will be slowing down as the company reduced its spending on promotion and a high-based effect last year, which saw higher transactions due to COVID-19 public movement restrictions.

    “There will be a normalisation for our food deliveries and e-commerce transactions…and there’s still macrouncertainty that will affect customer spending,” GoTo Group CFO Jacky Lo said in an investors call on Monday.

    GoTo said the group is on track to achieve positive adjusted EBITDA within the fourth quarter this year, while its 2023 adjusted EBITDA loss is expected to be in range of 5.3 trillion rupiah to 4.6 trillion rupiah.

    The results were indicative position and results based on unaudited reports. Audited numbers would be available by the end of March, it said.

    Gross revenue in the last quarter of 2022 was up 19 per cent year-on-year to 6.3 trillion rupiah, while net loss in the quarter was 19.5 trillion, up almost double from 10.2 trillion in the fourth quarter of 2021.

    For the whole year of 2022, it booked a net loss of 40.4 trillion rupiah or up 55.9 per cent from 2021’s net loss of 25.9 trillion rupiah.

    The group said the higher net loss was due to several reasons, including an 11 trillion rupiah goodwill impairment related to the business combination of Gojek and Tokopedia, which are both their units.

    Prior to the 2022 result announcement, shares of GoTo closed 6.9 per cent down or hit their bottom trading limit on Monday to 108 rupiah a piece.

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  • Indonesia’s GoTo to cut 1300 jobs to step up cost cutting

    Indonesia’s GoTo to cut 1300 jobs to step up cost cutting

    Indonesia’s biggest tech firm PT GoTo Gojek Tokopedia Tbk said on Friday (Nov 18) it was laying off 1,300 workers, or 12 percent of its workforce, joining a wave of technology firms retrenching after years of rapid hiring due to an uncertain economic outlook.

    “Challenging global macroeconomic conditions are having a significant impact on businesses around the world and GoTo, like other prudent companies, is making adjustments to ensure it can navigate the uncertain road that lies ahead,” it said in a statement.

    GoTo said it has achieved around 800 billion rupiah (US$51 million) in cost savings in the first half of this year through efficiency measures in technology, marketing and outsourcing.

    “However, the company has determined that further measures must be taken to ensure it is equipped to navigate the challenges ahead,” it said about the job cuts.

    Affected employees will receive at least one additional month’s salary on top of what is statutory and full notice in-lieu, GoTo said in a press release.

    They will also get to keep their laptops, access online training resources, and can be added to the GoTo alumni directory through which employees will be recommended to the GoTo business network.

    Psychological, financial and career counseling will be provided to those needing it until May 2023.

    GoTo, which offers ride-hailing and financial services, went public in April with a US$1.1 billion stock sale.

    Its shares are trading 44 percent below its initial public offering price, as investor sentiment on the tech sector sours amid soaring inflation and interest rates.

    The company, backed by SoftBank Group, Alibaba Group, and Singapore sovereign wealth fund GIC, is exploring a coordinated secondary offering of shares held by pre-IPO shareholders after a lock-up period ends on Nov 30.

    It reported in August that its half-year net loss more than doubled to nearly US$1 billion.

    In recent months, Southeast Asia’s largest-e-commerce firm Shopee cut jobs in various countries and shut some overseas operations as parent Sea struggled with losses.

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  • Indonesia’s GoTo posts net loss, warns of volatile market

    Indonesia’s GoTo posts net loss, warns of volatile market

    PT GoTo Gojek Tokopedia – whose businesses straddle e-commerce, on-demand apps and finance – saw its losses between January and June more than double from the same period the previous year.

    “2022 has been a volatile year in our market and the macro conditions driving this may persist for some time,” CEO Andre Soelistyo said in a webcast on their latest results.

    “We will remain watchful on how geopolitical tension, rising fuel cost, inflation and high interest rates will unfold,” he added.

    GoTo, which went public earlier this year, posted a net revenue of 3.4 trillion rupiah for the first half. It set a gross revenue guidance of 5.7 trillion to 6 trillion rupiah for its July – September period.

    GoTo debuted on April 11 after raising $1.1 billion in an initial public offering by selling around 4% of its shares at 338 rupiah per piece.

    Shares of GoTo closed at 324 rupiah per share on Tuesday, up 1.25% from its opening price. The financial results were made public after market closed.

    GoTo is seeking to raise about $1 billion through a convertible bond issue. The deal is expected to be launched in the fourth quarter.

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  • GoTo shares surge 23 per cent after IPO

    GoTo shares surge 23 per cent after IPO

    Shares of GoTo soared as much as 23 percent in their market debut on Monday after Indonesia’s largest tech company raised $1.1bn in a widely anticipated IPO, setting the mood for other tech offerings.

    GoTo shares climbed to as much as 416 rupiah ($0.029) versus their offer price of 338 rupiah ($0.024) per share, which was the high end of an indicative range for one of the world’s largest offerings so far this year. The shares later pared gains to trade at 384 rupiah ($0.027).

    The strong debut provides a boost to some of the tech giants which have backed GoTo and have seen their other investments battered by the global market rout since late last year, including longtime major investors SoftBank Group’s Vision Fund 1 and Alibaba Group Holding Ltd.

    “GoTo’s IPO is a watershed moment for Indonesia,” said Joel Shen, head of Asia technology at global law firm Withers. “With millions of users, drivers, and merchants, there’s no company that’s more plugged in to Indonesia’s digital economy,” he said.

    PT GoTo Gojek Tokopedia Tbk’s stock market debut is the culmination of last year’s merger between ride-hailing-to-payments company Gojek and e-commerce giant Tokopedia.

    “I hope that GoTo IPO will motivate our young generations to give new energy for Indonesia’s economic progress,” Indonesian President Joko Widodo said in a video message.

    The listing ceremony at the Jakarta bourse kicked off with a video of all of GoTo’s senior leadership in Gojek driver uniforms riding in-house Electrum brand electric motorcycles.

    GoTo’s IPO comes as record venture funding is creating a wave of startups in the $70bn digital market of Southeast Asia’s largest economy.

    The company sold only 4 percent of its shares in the IPO, and, unlike most other previous flotations, it was offered only to investors in Indonesia.

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