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GoTo Group, the Indonesian e-commerce juggernaut that made its debut on the Indonesian stock exchange earlier this year, said it plans to wait and see before a second overseas listing.
“Given the way the markets are and the volatility, I think we’re waiting for more stable and supportive markets before you think about taking that secondary listing off the market. [Indonesia Stock Exchange]” said GoTo Group President Patrick Kao at the Spark Founders Summit organized by Huawei Technologies in Bangkok, Thailand on Tuesday.
GoTo debuted on the Jakarta Stock Exchange on April 11 in a $1.1 billion listing. Shares rose more than 13 percent on the opening day, adding nearly $30 billion to the company’s market capitalization. The company gave away thousands of shares to its 600,000 drivers before it went public for the first time. In its prospectus, the Indonesian startup said it would launch a secondary listing on foreign stock markets by the end of 2023, citing options such as the New York Stock Exchange, Nasdaq and the Hong Kong Stock Exchange, among others.
GoTo shares have struggled since the start, falling 30.3% since April. However, the company is handling the technology process better than its two main Southeast Asian rivals.
Singapore-based ride-hailing company Grab, which raised $4.5 billion on the NASDAQ in December, valued the company at $37 billion, down 62.6 percent from the start of 2022. The New York Stock Exchange’s expansion into e-commerce and digital payments and transactions fell 75.4% over the same period. SEA continues to be the largest Southeast Asian company with a current market capitalization of around $25 billion, $20 billion for Goto, and $10 billion for Grab.
GoTo is the result of the May 2021 merger of ride-hailing company GoJek and e-commerce platform Tokopedia. Kao, who was president of Tokopedia before the merger, became president of the newly formed GoTo, with GoJec founder Andre Solstio becoming CEO.
‘The economy is going down’
Kao pointed to Indonesia’s strengths as a resilient market for GoTo amid global economic uncertainty. “Not only are commodity prices doing well, but the government’s move to support high-tech areas like batteries has created a lot of value,” Cao said.
Indonesia has the world’s largest deposits of nickel, an essential metal for electric vehicle batteries. Indonesian President Joko Widodo has banned exports of unwrought nickel to encourage investment in domestic nickel processing and electric vehicle manufacturing. Widodo is on an official visit to the US to personally woo Elon Musk to get Tesla to invest more in Indonesia.
Kao said the government’s efforts “created a virtuous circle within itself in terms of GDP growth and consumption growth in Indonesia.” In September, the Asian Development Bank increased its 2022 GDP growth forecast for Indonesia from 5.0% to 5.4%. The bank forecasts GDP growth of 4.3% for the year across Asia.
The GoTo president also pointed to the strength of Indonesia’s stock market: the Jakarta Composite Index is up 7.8% for the year, making it one of the few Asian – if not global ––Stock markets in positive territory in 2022.
With a population of 274 million, Indonesia accounts for about half of Southeast Asia’s population and generates 60 percent of the region’s GDP. GoTo has more than 95% revenue in Indonesia.
And Kao argued that Indonesia’s economy has plenty of room for further growth. He pointed out that although Indonesia’s economy is centered on the capital city of Java and Jakarta, which is the capital of the country, now the development is spreading to many Indonesian islands. Across the country, “the economy is slowing down,” Cao said. “This means that the entire population is growing in a very healthy way.”
According to Cao, there are still gaps in the country’s economy that can be filled, especially in financial services. It estimated that 48% of Indonesia’s population is unbanked, while only 6% of Indonesian consumers have a credit card. “There’s a lot of work to be done,” Cao said.
More broadly, Kao argues that Southeast Asia shows high smartphone usage, but low e-commerce and digital finance revenues, making it a good market for anyone looking to launch a startup.
“There’s a lot of opportunity,” he said.
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