Private equity firms KKR, Warburg Pincus are among the investors in Indonesian motorcycle-hailing app Go-Jek, betting on the swift transformation of the world’s fourth-largest population into a digital nation.
This equity capital raise of over $550 million, which represents the company’s latest round of financing, also came from Farallon Capital and Capital Group Private Markets, as well as existing shareholders and other international investors.
Previous investors include Sequoia India, Northstar Group, DST Global, NSI Ventures, Rakuten Ventures and Formation Group.
Home-grown ride-hailing apps are challenging global companies such as Uber Technologies, which agreed on Monday to sell its China business to China’s Didi Chunxing.
Such taxi-hailing app’s cash-burning business models have put them on a fundraising spree, seeking fresh capital from external investors, who later have pressured them to halt costly subsidy battles.
Didi, already backed by Chinese internet groups Alibaba and Tencent, closed a $7.3 billion fundraising in June, which included $4.5 billion equity and $2.8 billion in debt. That came one month after it had secured $1 billion from Apple. Meanwhile, Uber said in the same month it had raised $3.5 billion from Saudi Arabia’s sovereign wealth fund as part of its latest round of funding, which totaled more than $5 billion and valued the venture-backed firm at $62.5 billion.
Founded in just January 2015, Go-Jek has expanded from motorcycle ride-hailing into online food delivery, instant courier deliveries and lifestyle services, as well as services in the fast growing e-wallet services.
“The foundation of Go-Jek’s success is its focus on providing innovative, convenient and cost-effective online solutions that improve its customers’ everyday lives,” said Terence Lee, Director at KKR Asia in a statement.
Go-Jek’s mobile applications have been downloaded more than 20 million times as of June 30. In June only, there were over 20 million bookings on the Go-Jek platform, translating to roughly eight bookings per second being processed in that month.
Indonesia has 88.1 million active internet users and 36% of the population carry smartphones.
“With a rapidly expanding middle class, increasing urban density and a young demographic that is internet savvy, Go-Jek is well positioned to become the ‘go to’ platform for high frequency daily services including transport, food, logistics and payment,” Jeffrey Perlman, Head of Southeast Asia for Warburg Pincus, said,
Go-Jek’s motorcycle transport service, Go-Ride, is the biggest service of its kind in Indonesia with more than 200,000 drivers.
Outside of motorcycle transport, Go-Food is the second largest on-demand food delivery service in the world outside of China with over 15 million meals delivered since inception.
Go-Pay, launched in April 2016, is an e-wallet app in Indonesia where credit card penetration is under 2% and online payment nascent.
KKR makes its investment from its Asian Fund II. Warburg Pincus makes its investment from an affiliate of Warburg Pincus Private Equity XII, L.P.
