Tech company Google LLC officially confirmed on Monday its investment in Indonesian transport group GO-JEK, marking its first ride-hailing investment in Asia, as Alphabet Inc.’s affiliate aims to further enter into Indonesia’s thriving internet economy.
Google Vice President of Product Management Caesar Sengupta said that they decided to invest in the ride-hailing service, as they still want to do more to support and take part in the country’s growth.
The investment is also part of Google’s next billion users plan, which focuses in emerging markets, targeting its next billion users around the globe.
This transaction is GO-JEK’s first direct investment from the US search company in Indonesia, after its first deal in December 2017. GO-JEK has not yet commented on the matter.
Google did not reveal the exact amount of the investment, but sources familiar with the arrangement believed that it was investing about $100 million.
As regards GO-JEK, the startup firm is being run by a strong Indonesian management team and has made life simpler for the people in Indonesia through technology.
Google also stated that the investment allows them to team up with a great company in the country’s rising startup sector, while also deepening their commitment to Indonesia’s internet economy.
GO-JEK Keeping Up with the Competition
The deal came weeks after Google, along with Singaporean funding firm Temasek Holdings Private Ltd., Chinese internet group Meituan-Dianping, and others were reportedly investing in GO-JEK.
The investment was for a $1.2 billion fundraising round that is expected to help the ride-hailing group contend against rivals, Grab and Uber Technologies Inc. for customers in Indonesia.
The Indonesian transport provider has been working on the tranche since April last year, with commitments from China’s Tencent Holdings Ltd. and JD.com Inc. GO-JEK is currently valued at about $4 billion.
Its rivals, Grab and Uber, are supported by Japanese telecom corporation SoftBank Group Corp. and are growing in GO-JEK’s home market, which is Southeast Asia’s most populous city.
According to Google, with over 133 million people online, Indonesia has the world’s fifth-biggest population of internet users and is home to four of Southeast Asia’s eight unicorns.
However, even though the locals there show eagerness for a variety of mobile-based services, half of the country’s population still has yet to access the internet.
GO-JEK is widely believed to outperform Grab and Uber in the country, but as a whole, Grab seems to dominate Southeast Asia. The region is the third-largest ride-hailing market after China and the US around the globe and is expected grow significantly to become a $20.1 billion per year industry by 2025.
GO-JEK’s existing investors so far include, Temasek Holdings, investment firm KKR & Co. L.P, and venture capital group Sequoia Capital.
The company currently operates in Indonesia only, but it has been planning on expanding to other markets via its Go-Pay mobile payment service.
Last month, GO-JEK was able to get three fintech startups for unknown amounts, as part of its plan to dominate Indonesia’s digital payments industry.
Ride-hailing companies are investing tens of millions of dollars, in an effort to broaden their digital payment systems. They are also looking to let their users pay for third-party services.
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