The Abu Dhabi Investment Authority is leading a fundraising for Indonesia’s GoTo that is expected to increase the valuation of the south-east Asian country’s biggest start-up to at least $28.5bn, according to two people with knowledge of the deal.
An ADIA subsidiary is contributing $400m of the $1.5bn fundraising for the Indonesian super app, which offers ride-hailing, food delivery, ecommerce and financial services across south-east Asia.
The funding round comes ahead of a planned public listing by GoTo next year. GoTo declined to comment on the valuations.
The Middle Eastern pension fund has already pledged to invest billions of dollars in south-east Asia’s biggest economy, including Indonesia’s new sovereign wealth fund.
The investment underscored the fund’s belief in the fast-growing digital economies of south-east Asia, said Hamad Shahwan Al Dhaheri, executive director of ADIA’s private equities department.
Indonesia’s digital economy was worth $44bn last year and the country added 40m internet users, according to a report by Google, Temasek and Bain.
“We see strong potential in the region, particularly in Indonesia where the vibrant economic backdrop is encouraging ADIA to continue to deepen its presence,” Al Dhaheri added.
GoTo is raising at least $1.5bn for the financing but could raise much more once secondary sales are finalised, according to the two people with knowledge of the deal.
Temasek, Singapore’s state investment company, was also participating in the pre-IPO funding round, the people added. Temasek was not immediately available for comment.
GoTo said the deal was the “first principal investment by ADIA’s private equities department into a technology business in south-east Asia and its largest investment into Indonesia to date”.
The Indonesian company was formed in May via a merger between local tech groups Gojek and Tokopedia. The combination was valued at $18bn following the deal, which was based on the companies’ valuations as of their last funding rounds.
The latest fundraising valued the company at close to $27bn, the people said. Once the funds raised were included, the valuation would be at least $28.5bn, they said.
The investment comes as Indonesia’s economy has rebounded since the spread of the Delta variant of Covid-19 earlier this year forced the government to introduce strict lockdowns.
The country is reporting fewer than 1,000 cases a day, down from 50,000 in July. Gross domestic product growth for the third quarter is expected to reach as high as 5 per cent when the data are released next month.
While GoTo has operations in other south-east Asian nations, including Singapore, the Philippines and Vietnam, its focus remains Indonesia. The company sold its Thai operations to Malaysian entrepreneur Tony Fernandes’ AirAsia in return for a 5 per cent shareholding in AirAsia’s app business in July.
The pandemic-enforced lockdowns in Indonesia hit GoTo’s ride-hailing unit. However, food delivery and other businesses, including financial services, have received a boost from customers stuck at home and going online for the first time.
GoTo is planning a dual listing in Indonesia and the US in 2022, which will deliver a payday for its global investors, which include Google, Alibaba, Facebook, KKR, Tencent and Temasek.