(Bloomberg) — GoTo Group, Indonesia’s biggest tech company, surged on its first day of trading after raising $1.1 billion in one of the world’s largest initial public offerings this year.
The shares jumped as much as 23% and closed the day 13% higher at 382 rupiah in Jakarta, valuing the company at about $31.5 billion.
GoTo’s listing bucks a global trend of companies scrapping or delaying IPOs because of worries about Russia’s invasion of Ukraine, soaring inflation and rising interest rates. As Southeast Asia’s technology industry gains steam, GoTo’s strong debut bodes well for the region’s other technology companies seeking to list in Indonesia or overseas.
“The more these IPOs do well, the more Indonesia becomes a home for it, and you get a self-perpetuating type of situation,” said Angus Mackintosh, founder of CrossASEAN Research. “GoTo will likely have strong support in the near term given its broader exposure to the overall digital economy.”
GoTo is the largest of a crop of startups seeking to ride the rapid pace of mobile penetration and internet use in Southeast Asia, a region of more than 650 million people. Other regional technology companies that have been preparing for IPOs include PT Traveloka Indonesia and Blibli.com. GoTo will use the IPO to bankroll an expansion of its services to more markets, Chief Executive Officer and Co-founder Andre Soelistyo told Bloomberg Television.
It’s a matter of timing as to when GoTo will “expand more aggressively,” he said.
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Underscoring GoTo’s importance to the local economy and technology industry, Indonesia’s President Joko Widodo gave a short video address at the ceremony marking the debut on Monday. “I hope this GoTo IPO motivates young Indonesians to lend new energy to the technological leap in this country’s economy,” he said.
GoTo’s offering is the third-largest in Indonesia after PT Bukalapak.com and PT Dayamitra Telekomunikasi, known as Mitratel. The company immediately ranks among the most valuable companies listed on the Indonesia Stock Exchange along with PT Bank Central Asia, PT Bank Rakyat Indonesia and PT Telkom Indonesia.
The company is the result of last year’s merger between Indonesia’s two most valuable internet startups — ride-hailing provider Gojek and e-commerce firm Tokopedia — to get more firepower against rivals in an increasingly cutthroat market. Over the years, the two amassed a long list of investors, including Google, Tencent Holdings Ltd. and Sequoia Capital India. The latter was an early backer of both Gojek and Tokopedia.
GoTo is among Southeast Asian consumer-internet companies that are adding users at a rapid clip but have yet to generate sustainable profit. Still, GoTo is enjoying a leadership position in Indonesia, a country of more than 270 million people whose mobile-savvy consumers are shopping on Tokopedia’s platform and ordering rides and food via Gojek’s app.
The IPO “is testament of investors’ confidence on Indonesia’s promising digital economy outlook in the long term,” said Henry Wibowo, head of research at JPMorgan Sekuritas Indonesia. The country’s digital economy will expand to about $200 billion by 2025, backed by rising smartphone penetration and growing middle class, he said.
GoTo’s story started in 2009, when William Tanuwijaya, the son of a factory worker, made a bet on Indonesia’s economic and internet boom and founded Tokopedia — the name is a variant of the Indonesian word for “store.” A year later, Nadiem Makarim, a Harvard Business School grad and former McKinsey & Co. consultant, set up Gojek to arrange courier deliveries in Jakarta.
Soelistyo joined Gojek in 2015 after working as an investor at private-equity firm Northstar Group, one of the first institutional backers of the upstart. He and co-founder Kevin Aluwi were named co-CEOs of the ride-hailing company in October 2019, when Makarim left to join the government as the nation’s minister for education and culture.
(Updates with comment from analyst in 11th paragraph)
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