SINGAPORE (BLOOMBERG) - GoTo Group, Indonesia’s biggest tech company, surged on its first day of trading on Monday (April 11) after raising US$1.1 billion (S$1.5 billion) in one of the world's largest initial public offerings (IPOs) this year.
The shares jumped as much as 23 per cent and were up 15 per cent to 388 rupiah at the midday break in Jakarta, valuing the company at about US$32 billion.
GoTo’s listing bucks a global trend of companies scrapping or delaying IPOs because of worries about Russia’s invasion of Ukraine, soaring inflation and rising interest rates.
As South-east Asia’s technology industry gains steam, GoTo’s strong debut bodes well for the region’s other tech companies seeking to list in Indonesia or overseas.
The more these IPOs do well, the more Indonesia becomes a home for them and “you get a self-perpetuating type of situation”, said Mr Angus Mackintosh, founder of CrossAsean Research.
“GoTo will likely have strong support in the near term given its broader exposure to the overall digital economy,” he added.
GoTo is the largest of a crop of start-ups seeking to ride the rapid pace of mobile penetration and Internet use in South-east Asia, a region of more than 650 million people. Other regional tech companies that have been preparing for IPOs include Traveloka Indonesia and Blibli.com. GoTo will use the IPO to bankroll an expansion of its services to more markets, chief executive officer and co-founder Andre Soelistyo told Bloomberg Television. It is a matter of timing as to when GoTo will “expand more aggressively”, he said.
Underscoring GoTo’s importance to the local economy and tech industry, Indonesian President Joko Widodo gave a short video address at the ceremony marking the debut on Monday. “I hope this GoTo IPO motivates young Indonesians to lend new energy to the technological leap in this country’s economy,” he said.
GoTo’s offering is the third-largest in Indonesia after Bukalapak.com and Dayamitra Telekomunikasi, known as Mitratel. The company immediately ranks among the most valuable companies listed on the Indonesia Stock Exchange along with Bank Central Asia, Bank Rakyat Indonesia and Telkom Indonesia.
The company is the result of last year’s merger between Indonesia’s two most valuable Internet start-ups - ride-hailing provider Gojek and e-commerce firm Tokopedia - which aimed to get more firepower against rivals in an increasingly cut-throat market. Over the years, the two had amassed a long list of investors, including Google, Tencent Holdings and Sequoia Capital India.
GoTo is among South-east Asian consumer Internet companies that are adding users at a rapid clip but have yet to generate sustainable profit. Still, GoTo is enjoying a leadership position in Indonesia, a country of more than 270 million people whose mobile-savvy consumers are shopping on Tokopedia’s platform and ordering rides and food via Gojek’s app.
It all started in 2009 when Mr William Tanuwijaya, the son of a factory worker, made a bet on Indonesia’s economic and Internet boom and founded Tokopedia - the name is a variant of the Indonesian word for “store”. A year later, Mr Nadiem Makarim, a Harvard Business School graduate and former McKinsey & Co consultant, set up Gojek to arrange courier deliveries in Jakarta.
Mr Soelistyo joined Gojek in 2015 after working as an investor at private equity firm Northstar Group, one of the first institutional backers of the upstart. He and co-founder Kevin Aluwi were named co-CEOs of the ride-hailing company in October 2019, when Mr Makarim left to join the government as the nation’s minister for education and culture.