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The Amazon of Indonesia? GoTo Group IPO Decacorn -- Gojek Merges With Tokopedia

By Eric Cuka - Jun 23, 2021 at 9:45AM

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The largest business deal in Indonesia's history creates a formidable Southeast Asian tech giant, which will rival regional leaders. Could this IPO boost your long-term growth portfolio?

Gojek, a CNBC Disruptor 50 company, and e-commerce player Tokopedia recently announced a merger to create the GoTo Group. GoTo plans to complete an IPO in 2021, which will be listed in Jakarta and the United States, with an expected valuation between $35 and $40 billion. This historic merger marks Indonesia's largest business deal. That's right, Indonesia has its very own decacorn -- a start-up unicorn with a valuation of more than $10 billion.

Indonesia offers tremendous growth opportunities. The Southeast Asian total addressable market is expected to triple to $309 billion by 2025, and $124 billion of that TAM is represented by Indonesia.

Combining Gojek and Tokopedia will create a tech giant comprising

  • 100+ million monthly active users
  • 11+ million merchants
  • 2+ million drivers
  • 2% of Indonesia's $1 trillion GDP

An estimated 119 million Indonesians live in rural areas. Indonesia is a large, complex archipelago of 17,508 islands, which creates a logistical nightmare for businesses like Gojek and Tokopedia. Combining forces makes sense, and it can unlock tremendous operational advantages. I see this as a threat to Sea Limited's (SE -6.38%) Shopee e-commerce business, which has already been losing market share to Tokopedia.

Combining Gojek and Tokopedia will also allow GoTo Group to take on larger rivals such as Grab, which is based in Singapore and also looking to complete a SPAC with Altimeter Growth Corp (AGCU.U) later this year. Upon completion, Grab's plan is to list on the NASDAQ using the ticker symbol GRAB.

GoTo has opportunities in several business segments. An estimated 92 million Indonesians are unbanked, which creates an enormous opportunity for GoTo Group's financial technology (fintech) division.

Could GoTo Group be a three-headed monster like Singapore's Sea Limited? Or even the Amazon (AMZN -1.85%) of Indonesia? 

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Eric Cuka owns shares of Amazon and Sea Limited. The Motley Fool owns shares of and recommends Amazon and Sea Limited. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool has a disclosure policyEric is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

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Stocks Mentioned

Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$142.10 (-1.85%) $-2.68
Sea Limited Stock Quote
Sea Limited
SE
$72.49 (-6.38%) $-4.94
Altimeter Growth Corp. Stock Quote
Altimeter Growth Corp.
AGCU.U

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