Indonesia’s Gojek, Tokopedia in advanced merger talks ahead of potential IPOs
Published: Jan 07, 2021 03:13 PM

People wearing face masks walk on a street in Jakarta, Indonesia, Nov. 2, 2020. (Xinhua/Zulkarnain)

Indonesian ride-hailing and payment firm Gojek and e-commerce leader Tokopedia are in advanced talks to seal a $18 billion merger ahead of potential stock market listings in Jakarta and the US, people with knowledge of the matter said.

The talks come as the decade-old start-ups seek profitability by offering a bouquet of services as varied as grocery shopping and hairdressing appointments under a single platform.

The pair have also been benefiting from virus-busting stay-home policies that have stoked demand for food delivery and e-payments in the archipelago's fast-growing e-commerce market.

"An international listing for a regional internet group will showcase that Southeast Asia isn't a one-hit wonder. It'll pave the way for global growth and exits for several other high-growth start-ups from the region," said Varun Mittal, head of emerging markets fintech business at E&Y.

Common investors in the pair include Temasek Holdings, Sequoia Capital and Google. 

Alibaba Group Holding and SoftBank Group Corp are among Tokopedia's investors, while Gojek's investors include Warburg Pincus and Tencent Holdings.

Three of the people with direct knowledge of the matter said on Tuesday that Gojek and Tokopedia in late December agreed to conduct due diligence of each other's business.

Ride-hailer Gojek is a one-stop shop for a multitude of services whereas Tokopedia is a marketplace which, unlike rivals such as Bukalapak, does not hold its own inventory.

The founders and some senior executives of Gojek and Tokopedia have been friends for the past decade and are seeking to finalize a deal in the first half of this year, the people said.

"These are amicable conversations between mutually trusted partners. The broad terms are largely agreed," said one person.

Talks between the companies started in 2018 but did not lead to a deal, two people said. Negotiations picked up in November after months-long merger talks between Gojek and bigger rival Grab started faltering, they said.

All the sources declined to be identified as the talks were private. Gojek, Tokopedia and Grab declined to comment.

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