Defying global market turmoil, superapp GoTo has filed to raise at least IDR15.2 trillion, or around $1.1 billion, in an initial public offering (IPO) on the Indonesia Stock Exchange.

GoTo was created by merging two of Indonesia’s tech giants – ride-hailing firm GoJek and e-commerce player Tokopedia, creating a superapp combining e-commerce, transportation and financial services.

«Indonesia is one of the largest and most exciting growth markets in the world, as reflected in the resilience our capital market has shown this year, against a backdrop of global market volatility. We hope that our IPO will show the world the tremendous opportunity that exists in our country and throughout the Southeast Asia region,» Andre Soelistyo, GoTo Group CEO, said in a press release Tuesday.

Ecosystem Growth

«Our ecosystem of on-demand, e-commerce and financial technology services connects millions of consumers, driver-partners and merchants, with the mission to empower progress for everyone in the fast-growing digital economy,» Soelistyo said.

The company said its ecosystem contributes to more than 2 percent of Indonesia’s gross domestic product (GDP), based on its 2020 pro forma gross transaction value as a percentage of the country’s 2020 GDP, based on Euromonitor data.

GoTo estimated its pro forma gross transaction value for the 12 months ended 30 September at IDR414.2 trillion, or around $28.8 billion, with more than 55 million annual transacting users on the platform.

Fintech Growth

In its prospectus, GoTo said it pro forma gross transaction value for financial technology services in 2021 was IDR142 trillion, up from IDR80.4 trillion in 2020. Gross income for financial technology services was IDR794.52 billion in 2021, the prospectus said.

The total addressable market for financial technology services is expected to rise to $70.1 billion in 2025 from $17.8 billion in 2020, GoTo said, citing data from RedSeer. The e-commerce total addressable market for physical goods is expected to rise to $137.5 billion in 2025, from $44.6 billion in 2020, GoTo said, citing the data.

The potential for growth in financial services in Indonesia is large: Financial services inclusion in Indonesia remains relatively low, despite the Covid-19 pandemic boosting acceptance and use of digital financial services.  

Integrating Payments

According to data in the 2019 Google, Temasek and Bain e-Conomy report, published pre-Covid, Indonesia had 92 million unbanked adults and 47 million who were underbanked, or who had a bank account but no access to credit, investments or insurance. Indonesia’s total population was around 273.5 million in 2020.

Like other Indonesian tech players, GoTo has integrated its payment services with other financial players, such as wealth management app Pluang, boosting the range of financial services it can use to entice customers.

The listing of 48 billion new shares, representing up to 4.35 percent of GoTo’s enlarged capital, will be IDR316 to IDR346 a share, with a potential overallotment option which could take the offering to 52 billion shares, the release said.

Downsized Offering

The size of the offering has been downsized from previous expectations GoTo would aim to raise $1.5 billion to $2 billion, giving it a valuation of $31 billion to $42.7 billion, DealStreetAsia has reported, citing recent global market volatility. 

That compares with e-commerce rival Bukalapak raising $1.5 billion in an August 2021 IPO in Indonesia, in which it sold 25 percent of its enlarged share capital, valuing the company at $7.5 billion, according to a Tech in Asia report. 

It’s been a rocky market for GoTo’s already listed peers – Sea Ltd. and Grab, which have seen their share prices plunge this year after their earnings disappointed. Sea’s shares are down more than 60 percent year-to-date, while Grab’s are off around 58 percent.

Strong Investor Cast

Southeast Asia’s superapps may also see slower growth ahead as the Covid-related restrictions which spurred the fast takeup of digital services ease.

GoTo has attracted an all-star cast of investors, raising funds from Singapore sovereign wealth fund GIC, Malaysian sovereign wealth fund Khazanah, Alibaba Group, Softbank Vision Fund, Google, Tencent Holdings, Abu Dhabi Investment Authority and Fidelity International.