Go-Jek, the company leading Uber and Grab in Southeast Asia’s largest market, has bagged a hattrick of deals to advance its mobile payment strategy.
Indonesia-based Go-Jek revealed it has acquired offline payment firm Kartuku, payment gateway Midtrans and payment and lending network Mapan for undisclosed sums. Together, the trio process $5 billion in payment across cards and digital wallets, Go-Jek said.
The company started out in 2015 offering a ride-hailing service for motorbike taxis, a medium of transport popular for getting around capital city Jakarta’s traffic-clogged streets, but it has since expanded to four-wheeled transportation, on-demand services and payments.
Go-Jek claims 900,000 drivers and 15 million weekly active users. Outside of ride-sharing, it said its business covers 125,000 merchants with over 100 million transactions processed on its platform per month. The company is close to raising upwards of $1.2 billion in new funding, which will include money from Chinese duo JD.com and Tencent.
The investment is needed given the capitalization of Uber, the world’s highest-backed private tech company, and Grab, which recently refueled its tanks with a massive $2 billion round, who are battling over a market that shows promising growth signs.
Ride-sharing in Southeast Asia is projected to become a $20 billion a year business by 2025, according to a report co-authored by Google, with Indonesia accounting for upwards of 40 percent. Already, consumer spending on the taxi apps has more than doubled over the last two years to cross an estimated $5 billion in 2017.
The goal of the acquisitions — all of which are fellow Indonesian businesses — is to bolster Go-Jek’s payment network, which centers around its Go-Pay mobile payment service.
Go-Jek CEO Nadiem Makarim recently told Bloomberg that his firm plans to expand Go-Pay to cover more retails both online and offline. The company is seizing the opportunity to offer basic payment services to cater to the majority of the population in Indonesia who don’t have access to traditional banking. Credit card penetration is said to be below five percent in the country, the world’s fourth most populous nation.
“We are now taking Go-Jek to the next stage,” Makarim said in a statement. “Through the acquisitions announced today, we will be working hand in hand with three likeminded companies who share our vision and ethos. This marks a significant development in our position at the heart of Indonesia’s vibrant fintech industry.”
The heads of the three acquired companies will take up prominent roles inside Go-Jek. Kartuku CEO Thomas Husted becomes its CFO, Mapan’s Aldi Haryopratomo will lead Go-Pay, and Ryu Suliawan of Midtrans is to head up its merchant platform.
Grab has made moves to emulate Go-Jek. Earlier this year, the Singapore-headquartered firm set aside $700 million to develop its business in Indonesia, that included R&D budget and capital to buy promising companies. Kudo, an offline payment network, became its first acquisition.
Like Go-Jek, Grab expanded its payment service — GrabPay — to cover offline retailers. Initially that is limited to Singapore, but the firm plans to expand the feature across Southeast Asia in 2018. You can bet that Indonesia is top of its list.
Uber recently integrated its first payment wallet in Southeast Asia — Momo in Vietnam — and it is now collaborating with taxi operators, but it lacks the medley of services that Go-Jek and Grab offer to consumers in Indonesia.
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