GoTo Group, the Indonesian e-commerce juggernaut that braved a choppy IPO market earlier this year to debut on the Indonesian stock exchange, plans to wait before launching a second listing overseas.
“Given the state of the markets and the volatility, I think we’ll wait for more stable and supportive markets before considering a secondary listing outside of [Indonesia Stock Exchange]’ said Patrick Cao, Group President of GoTo, during the Spark Founders Summit organized by Huawei Technologies on Tuesday in Bangkok, Thailand.
GoTo debuted on the Jakarta Stock Exchange on April 11 with a listing that raised $1.1 billion. Shares are up more than 13% on opening day, giving the company a market cap of about $30 billion. The company gave away thousands of shares to its 600,000 drivers ahead of its commercial debut. In its prospectus, the Indonesian startup said it would also launch a secondary listing on a foreign stock market by the end of 2023, mentioning options such as the New York Stock Exchange, the NASDAQ and the Hong Kong Stock Exchange, among others.
GoTo’s stock has struggled since its debut, falling about 30.3% since April. Still, the company is handling the tech routine better than its two main Southeast Asian rivals.
Shares of Singapore-based ride-hailing company Grab, which raised $4.5 billion in its December NASDAQ debut and valued the company at $37 billion, are down 62.6% since the start of 2022 broken into. Shares in SEA, a Singapore-based digital entertainment company that has expanded into e-commerce and digital payments and deals on the New York Stock Exchange, have plunged 75.4% over the same period. SEA remains Southeast Asia’s most valuable company with a current market cap of approximately $25 billion, compared to approximately $20 billion for GoTo and $10 billion for Grab.
GoTo is the product of the May 2021 merger of ride-hailing service provider GoJek and e-commerce platform Tokopedia. Cao, who was president of Tokopedia prior to the merger, became president of the newly formed GoTo, while Andre Soelistyo, the founder of GoJek, became CEO.
“The economy is booming”
Cao pointed to Indonesia’s strengths as a GoTo resilience market amid global economic uncertainty. “Not only are commodity prices doing well, but the government’s move to go more downstream to support more high-tech areas like batteries has really created a lot of value,” Cao said.
Indonesia has the world’s largest reserves of nickel, a critical metal for electric vehicle batteries. Indonesian President Joko Widodo banned the export of unprocessed nickel to encourage investment in domestic nickel processing and electric vehicle manufacturing. Widodo even took a detour during an official visit to the US to personally influence Elon Musk to get Tesla to invest more in Indonesia.
Cao said the government’s efforts have “created a beautiful virtuous circle in Indonesia itself in terms of GDP growth and consumption growth.” In September, the Asian Development Bank raised its 2022 GDP growth forecast for Indonesia to 5.4% from 5.0%. The bank forecasts Asia-wide GDP growth of 4.3% for the year.
GoTo’s president also pointed to the strength of Indonesia’s stock market: the Jakarta Composite Index is up 7.8% for the year, making it one of the few Asian — if not global — indexes—Equity markets in positive territory in 2022.
With a population of 274 million, Indonesia accounts for almost half the population of Southeast Asia and generates almost 60% of the region’s GDP. GoTo counts on Indonesia for more than 95% of its sales.
And Cao argued that the Indonesian economy has plenty of room for further growth. He noted that while Indonesia’s economy used to be centered around the main island of Java, which is home to the country’s capital, Jakarta, growth is now spreading to Indonesia’s many islands. “The economy is booming” across the country, Cao said. “It means the whole nation is growing in a very healthy way.”
Cao said there are still gaps in the country’s economy that GoTo can fill, particularly in financial services. He estimates that “about 48%” of the Indonesian population does not have a bank account, while only about 6% of Indonesian consumers have a credit card. “There is so much to do,” Cao said.
More generally, Cao argued that Southeast Asia has high smartphone adoption but low penetration of e-commerce and digital finance, making it a good market for anyone looking to start a startup.
“There are just so many options,” he said.
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