Indonesia’s Gojek Raised $1.2 Billion in Recent Funding

According to some sources, which have seen the internal reports, an Indonesia-based ride-hailing turned payment firm, Gojek has secured $1.2 billion in a fresh round of funding last week. With the latest funding, the Southeast Asian ride-hailing giant has accumulated total funding of nearly $3 billion so far.

The news of the internal memo of Gojek was first reported by Bloomberg News which described that the funding round was successfully secured amid the turbulent atmosphere around Coronavirus outbreak.

Strong Demand from Investors

In the memo, it was mentioned that the company has been witnessing “strong demand” among the investment community and investors despite “turbulence within the tech investment environment and the coronavirus pandemic”. Gojek spokesperson has declined to comment on the memo so far.

Gojek, as a ride-hailing service founded in 2010, has expanded its operations to other areas including online payment, online food services which can be available to the users through a one-stop app. The company is gradually expanding widely across the region besides the existing tight competition from its rival, Grab Holding Inc. (Grab) backed by the Japanese conglomerate group, SoftBank Group Corp. (SoftBank).

The letter, written by Gojek’s co-chief executives, Kevin Aluwi and Andre Soelistyo, claimed that the firm would focus on the improvement of “logistical capabilities…supply chains to keep people fed and payments services,” with the new investment funding. According to Bloomberg, Gojek’s new funding was one of the largest investments to a private company since the eruption of the virus pandemic in the central province of Wuhan, China in January.

Merger Deals

Gojek and Grab have been in tight competition well beyond ride-hailing in Southeast Asia since both the companies are looking to expand their operations including in meal deliveries and both of them aim to become consumers’ default, all-purpose app. Two sources told Reuters that, however, the senior executives from the two firms have started meeting earlier this year and the scope for a possible merger was discussed.

As analysts explained, the new capital investment for Gojek would make it in a stronger position in any negotiations with Grab if both of them are likely to combine. However, both companies are struggling as they lose money since they have made efforts to expand into other businesses apart from in ride-hailing.

Meanwhile, several regulators from Singapore, Indonesia, and other countries from Southeast Asia are likely to oppose any merger deal between the two firms since it will reduce the competition and affect market behavior.

Denying the merger deal rumor, Soelistyo and Aluwi told employees in the internal memo, “We’re not stopping there as we are still seeing strong demand among the investment community to partner with us. There are a number of exciting ongoing conversations that we will be able to update you on very soon.”

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