GoTo surged as much as 23 per cent in its stock market debut on Monday (Apr 11) after Indonesia’s largest tech company raised US$1.1 billion in a keenly watched IPO, fuelling expectations of more offerings from the sector in Southeast Asia’s largest economy.
The initial public offering (IPO) is the world’s fifth-largest this year, Refinitiv data showed, and came despite IPOs being pulled due to the Russia-Ukraine war and rising interest rates.
PT GoTo Gojek Tokopedia Tbk was formed by last year’s merger of ride-hailing-to-payments company Gojek and e-commerce leader Tokopedia, with its businesses straddling millions of small and mid-sized firms across the archipelago.
“There was no perfect timing for this IPO, but our focus was on Indonesia, with a local investor audience,” GoTo’s CEO Andre Soelistyo, a former private equity banker who steered Gojek’s push into consumer services, told reporters.
The strong listing is a boost especially for tech giants backing GoTo, including SoftBank Group’s Vision Fund 1 and Alibaba Group Holding, who have been battered by the global market rout since late 2021.
It also affirms the attractiveness of the US$70 billion digital market in Indonesia, where record venture funding is creating a wave of startups.
“GoTo’s IPO is a watershed moment for Indonesia,” said Joel Shen, head of Asia technology at global law firm Withers.
GoTo’s shares rose to as much as 416 rupiah (US$0.0290) minutes after trading began, compared with the 338 rupiah IPO price. Sold only to investors in Indonesia, unlike most other domestic offerings, the shares closed the day up 13 per cent at 382 rupiah.
It became Indonesia’s third most-valuable listed firm at US$33 billion, after Bank Central Asia and Bank Rakyat Indonesia, and just above Telkom Indonesia’s US$31.6 billion value.
“I hope that GoTo IPO will motivate our young generations to give new energy for Indonesia’s economic progress,” Indonesia President Joko Widodo said in a video message at the listing ceremony, which kicked off with a video of GoTo’s senior leadership in Gojek driver uniforms riding in-house Electrum brand electric motorcycles.
GoTo’s founders only have a small stake after Gojek, Tokopedia and the combined firm previously raised US$9 billion from investors including Alphabet’s Google, Tencent , Temasek Holdings and the Abu Dhabi Investment Authority.
STOCK MARKET BOOM
With sharp share price declines seen in US-listed peers Grab Holdings and Sea that operate across Southeast Asia, GoTo’s valuation was lower than expected. All three loss-making companies are under pressure to turn around near-term.
GoTo’s main focus is Indonesia, where the digital economy is forecast to grow nearly five times to up to US$330 billion by 2030 from 2021.
It boasts 2.5 million drivers, 14 million merchants and 55 million annual transacting users, and also has small operations in Singapore and Vietnam.
“We see significant room for GoTo to grow further, given its low market penetration and low-frequency usage, and Indonesia’s low average consumer spending,” Nomura analyst Ahmad Maghfur Usman said in a report, initiating coverage with a target price of 416 rupiah.
GoTo’s IPO benefited from booming equities, with Jakarta’s main index rising 1 per cent to a record on Monday, taking gains to 11 per cent so far this year and making it Asia’s best performing market.
It sold only about 4 per cent of its shares in the IPO. GoTo is the first domestic firm to issue multiple class voting shares and tap new rules allowing unprofitable firms to list directly on the bourse’s main board.
GoTo allocated shares to 600,000 drivers and said a record 300,000 investors participated in the IPO.
Startups considering local IPOs include Binance-backed crypto firm TokoCrypto and online travel booking company Tiket.com, sources told Reuters. Both firms were not reachable for comments.
“Many Indonesian startups are watching today’s IPO closely and I expect we will see a wave of other Indonesian tech IPOs going forward,” said Shen from law firm Withers.