Technology sector

GoTo has a good launch, boosting the tech sector in Indonesia

GoTo rose 23% on its market debut on Monday after Indonesia’s biggest internet company raised $1.1 billion in a closely watched initial public offering, fueling hopes for further deals of the region’s largest economy. According to data from Refinitiv, the IPO is the fifth-largest in the world this year, and it has continued despite the fact that many other IPOs around the world have been canceled due to the Russian-Ukrainian conflict. and rising interest rates. With its operations spanning millions of small and medium businesses across the archipelago, PT GoTo Gojek Tokopedia Tbk was founded last year through the merger of start-up Gojek and e-commerce pioneer Tokopedia.

The strong listing will boost tech giants backing GoTo, including SoftBank Group’s Vision Fund 1 and Alibaba Group Holding Ltd, which have been battered by the global market rout since late 2021. It also affirms market appeal $70 billion Indonesian digital hub, where record company funding is creating a wave of startups. “GoTo’s IPO is a watershed moment for Indonesia,” said Joel Shen, chief technology officer for Asia at global law firm Withers. Indonesian startups are also planning to brave the market with IPOs, including Binance-backed crypto firm TokoCrypto and online travel booking firm Tiket.com, sources familiar with the matter. The companies could not immediately be reached for comment.

“There was no perfect timing for this IPO, but we focused on Indonesia, with a local investor audience,” GoTo CEO Andre Soelistyo, a former banker, told reporters. private equity firm that led Gojek’s push into consumer services. Shares of GoTo hit 416 rupees minutes after the start of trading, compared to the IPO price of 338 rupees. Sold only to investors in Indonesia, unlike most other domestic offerings, the shares ended at 382 rupees, up 13%.

“Many Indonesian startups are watching today’s IPO closely and I expect we will see a wave of more Indonesian tech IPOs,” Shen said. GoTo became Indonesia’s third largest listed company with $31.6 billion, along with Telkom Indonesia, and after Bank Central Asia and Bank Rakyat Indonesia. “I hope (the) GoTo IPO will motivate our younger generations to inject new energy into Indonesia’s economic progress,” Indonesian President Joko Widodo said in a video message during the listing ceremony. , which began with a video of GoTo leadership in Gojek driver uniforms. ride an electric motorcycle.

GoTo is primarily focused on Indonesia, where the digital economy is expected to grow nearly five times current levels, to $330 billion, by 2030. It has 2.5 million drivers, 14 million merchants and 55 million users transacting annually, and has small operations in Singapore and Vietnam. “We see significant growth room for GoTo, given its low market penetration and low frequency usage, as well as Indonesia’s low average consumer spending,” said Nomura analyst Ahmad Maghfur. Usman in a report, initiating a hedge with a target price of Rs 416.

GoTo’s IPO has benefited from the stock boom, with Jakarta’s main index hitting a record high on Monday and rising 9% so far this year, making it the best-performing market in Asia. GoTo’s founders only retained a small stake after Gojek, Tokopedia and the combined company raised $9 billion from investors including Alphabet’s Google, Tencent, Singapore state investor Temasek Holdings and the Abu Dhabi Investment Authority. Sharp declines in the share price of U.S.-listed peers Grab Holdings and Sea, which operate across Southeast Asia, dampened GoTo’s valuation as it proceeded with the offering. The three loss-making companies are under pressure for a short-term turnaround.

GoTo only sold about 4% of its shares, with investors subject to an eight-month lock-up, or two years for those who held multiple voting shares. It is the first to issue shares with multiple voting rights, taking advantage of the new rules. GoTo awarded shares to 600,000 drivers and said a record 300,000 investors participated in the IPO.

Summary of news:

  • GoTo has a good launch, boosting the tech sector in Indonesia
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