Beijing time on the afternoon of March 17, according to Bloomberg, the global technology industry is currently experiencing turbulence, while suffering from the impact of a new coronavirus pandemic. Still, Gojek, the Southeast Asian ride-sharing travel giant, has secured $1.2 billion in financing to expand against Grab.
Just over the past week, the COVID-19 outbreak has accelerated its spread and triggered turmoil in global markets, while a new round of funding for Gojek has been finalized. According to an internal memo obtained by Bloomberg, the company raised just under $3bn after the funding round.
Gojek’s new round of financing is the world’s largest since a new coronavirus outbreak in central China in January. The new coronavirus has added to global economic uncertainty, cooling trading activity around the world. Investors are increasingly cautious about valuations of technology stocks, as evidenced by SoftBank’s struggling position to push for high prices for successful companies such as WeWork and Oyo. The Japanese investment giant is not a supporter of Gojek, but it has injected about $3bn into Its Singapore-based rival Grab.
“We’re not going to stop here because we still see a strong willingness from the investment community to work with us,” Andre Soelistyo and Kevin Aluwi, Gojek’s co-chief executives, told employees in an internal memo. There are a lot of exciting conversations going on and we’ll be updated with you soon. “
The new round of financing puts Gojek in a better position in negotiations with Grab: two of Southeast Asia’s most valuable start-ups have reportedly discussed a possible merger, although Gojek has denied the reports and said there are no plans to merge.
But if the two sharing giants do decide to swap assets or merge in some countries, more capital injections will give Gojek a more lucrative negotiating position. As the two companies expand edaveed in taxiing, feeding and paying, they are both losing money, a result that has led some investors in both companies to favour a truce. However, regulators in Singapore, Indonesia and other countries are likely to oppose any deal that reduces competition in the industry.
Gojek and Grab’s competition in Southeast Asia has gone far beyond the service, which is an important battleground for food delivery services. Both apps are targeted to become the default full-life service application for consumers.
Gojek did not specify where the new funds came from. Amazon is said to be one of the companies involved in the financing talks, though it is unclear whether the e-commerce giant has finally made an investment. But the company said it was still in talks with potential investors.
The deal conveys continuity after co-chief executive nadim Makarim took over from founder Nadim Makarim to head Indonesia’s most valuable start-up. In October last year, the entrepreneur left his company to become Indonesia’s minister of education and culture.
Gojek, whose supporters include Google, Tencent Holdings Ltd and Temasek Holdings, said the new funds would continue to expand despite the current turmoil. Gojek launched an app in Jakarta in 2015 to hail motorcyclerentals and now offers a range of other on-demand services, such as home cleaning and drug delivery. The company’s final valuation is $10 billion, according to CB Insights.
“At the beginning of last year, we announced a $1 billion financing and set ourselves a goal of increasing the group’s total funding to $2.5 billion by the beginning of the year,” Soelistyo and Aluwi said in an internal memo. It’s easy for us to get past our goals. “