GoTo Group of Tokopedia-Gojek merger is Indonesia’s biggest tech company

Establishment of GoTo highlights the huge potential of Indonesia’s digital economy, which is expected to reach a gross merchandise value of $125 billion by 2025, the largest in Southeast Asia.

14, Jun. 2021

GoFood delivery is one of the many services of the GoTo Group formed in May 2021 following the merger of Gojek ride-hailing and Tokopedia e-commerce, two of the most successful startups in Indonesia. (Photo: GoTo)
GoFood delivery is one of the many services of the GoTo Group formed in May 2021 following the merger of Gojek ride-hailing and Tokopedia e-commerce, two of the most successful startups in Indonesia. (Photo: GoTo)

On May 17, 2021, two of Indonesia’s biggest internet companies — ride-hailing and payments giant Gojek and e-commerce leader Tokopedia — announced an $18 billion merger to create ‘GoTo Group’, in what is the country’s largest-ever business deal.

The ultimate aim of GoTo would be to go public, with a market valuation estimated at between $30-and-$40 billion in Jakarta and the US.

This will be the first IPO by an Indonesian tech start-up and paves the route for others to follow, such as Bukalapak, another e-commerce platform.

The merger will help Gojek and Tokopedia compete with its regional rivals Grab Holdings, and internet company Sea Ltd., which operates the e-commerce platform Shopee.

Sea has a market valuation of $112 billion and Grab announced in April a $40 billion special purpose acquisition company (SPAC) merger to go public on the Nasdaq.

The combined ecosystem of Gojek and Tokopedia accounts for some 2 percent of Indonesia’s GDP, with a combined number of active users in excess of 100 million. Furthermore, GoTo has over two million registered drivers and more than 11 million merchants.

As of 2020, the combined gross transaction value of Gojek and Tokopedia reached $22 billion with over 1.8 billion transactions recorded in the same year.

GoTo’s inception highlights the huge potential of Indonesia’s digital economy. According to a report by Bain & Co, Temasek, and Google, Southeast Asia’s digital economy is poised to reach a gross merchandise value (GMV) of over $300 billion by 2025, of which roughly $125 billion can be attributed to Indonesia’s market, making it the largest in the region.

Indonesia is Southeast Asia’s fastest-growing internet economy, boosted by more than 170 million internet users, and an e-commerce landscape that had a GMV of $40 billion in 2020.

Indonesia’s large market is also a draw for big competition resulting in the country’s successful technology unicorns constantly innovating new ways to grow.

Gojek, for instance, originally started as an online motorbike taxi service in 2010 but has since developed into a ‘super app’ offering over 20 services, ranging from food and grocery delivery, e-payments, ticketing, and even on-demand make-up-artists.

Tokopedia provides digital products, such as credit cards, utility payments, game vouchers, and healthcare payments, in addition to its main consumer-to-consumer (C2C) business platform.

E-commerce is set to be the main driver of growth for Indonesia’s digital economy; an industry poised to be valued at $83 billion by 2025.

Over 10 percent of Indonesia’s population of 270 million is already engaged in online shopping, with over 58 percent of transactions conducted through mobile shopping services.

Notable foreign e-commerce platforms that have taken advantage of Indonesia’s large consumer market are Singapore’s Lazada and Shopee, which garnered over 140 million monthly visits between them.

Indonesia is home to 20 percent of all fintech companies in Southeast Asia, and despite its infancy, is expected to generate some $8.6 billion in revenue over the next five years.

GoTo has the potential to provide financial solutions to the country’s underbanked and unbanked population, which is estimated at 47 million and 92 million people respectively.

This is because some 60 percent of Indonesia’s workforce and micro, small, and medium-sized enterprises (MSMEs) are in the informal sector, and thus, do not have access to financing from banks.

Traditionally, such MSMEs do not have business models that are compatible with the characteristics of banking products. For instance, many MSMEs do not have collateral of large value, and many do not qualify for loan schemes.

Fintech firms have been trying to fill this gap through P2P lending schemes, whereby they provide microloans with the terms of maturity that are small and short, usually within a few weeks and with borrowers typically receiving no more than $100.

The funds are also disbursed within 24 hours, making them popular for their convenience.

As of 2020, P2P lending reached $7.7 billion from 160 fintech companies officially listed by Indonesia's Financial Services Authority (OJK).

*This article was reproduced with the kind permission of ASEAN Briefing. Please visit them for ASEAN business news updates at