GoTo makes robust debut, lifts temper for Indonesia tech sector

GoTo soared as a lot as 23% in its market debut on Monday after Indonesia’s largest tech firm raised $1.1 billion in a keenly watched IPO, fuelling expectations of extra choices to return from the sector in Southeast Asia’s largest financial system.

The preliminary public providing (IPO) is the world’s fifth-largest this yr, Refinitiv knowledge confirmed, and went ahead regardless of many IPOs throughout the globe being pulled as a result of Russia-Ukraine battle and rising rates of interest.

PT GoTo Gojek Tokopedia Tbk was shaped by final yr’s merger of trip hailing-to-payments firm Gojek and e-commerce chief Tokopedia, with its companies straddling hundreds of thousands of small and mid-sized corporations throughout 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 non-public fairness banker who steered Gojek’s push into client providers, advised reporters.

GoTo’s shares rose as excessive as 416 rupiah minutes after the beginning of commerce, in contrast with the 338 rupiah IPO value. Sold solely to traders in Indonesia, in contrast to most different home choices, the shares ended at 382 rupiah, up 13%.

The robust itemizing will enhance tech giants backing GoTo, together with TenderBank Group’s Vision Fund 1 and Alibaba Group Holding Ltd, which have been battered by the worldwide market rout since late 2021.

It additionally affirms the attractiveness of Indonesia’s $70 billion digital market, the place report enterprise funding is making a wave of startups.

“GoTo’s IPO is a watershed moment for Indonesia,” mentioned Joel Shen, head of Asia know-how at international legislation agency Withers.

Indonesian startups additionally contemplating braving the market with IPOs embody Binance-backed crypto agency TokoCrypto and on-line journey reserving firm Tiket.com, sources accustomed to the matter advised Reuters. The corporations couldn’t instantly be reached for remark.

“Many Indonesian startups are watching today’s IPO closely and I expect we will see a wave of other Indonesian tech IPOs going forward,” Shen mentioned.

STOCK MARKET BOOM

GoTo turned Indonesia’s third most-valuable listed agency at $31.6 billion, together with Telkom Indonesia, and after Bank Central Asia and Bank Rakyat Indonesia.

“I hope that (the) GoTo IPO will motivate our young generations to give new energy for Indonesia’s economic progress,” Indonesia President Joko Widodo mentioned in a video message on the itemizing ceremony, which started with a video of GoTo’s management in Gojek driver uniforms driving electrical bikes.

GoTo’s IPO benefited from booming equities, with Jakarta’s primary index hitting a report on Monday and up 9% thus far this yr, making it Asia’s finest performing market.

GoTo’s founders retained solely a small stake after Gojek, Tokopedia and the mixed agency raised $9 billion from traders together with Alphabet’s Google, Tencent, Singapore state investor Temasek Holdings and the Abu Dhabi Investment Authority.

Sharp share value declines in U.S.-listed friends Grab Holdings and Sea, which function throughout Southeast Asia, dampened GoTo’s valuation because it proceeded with the providing. All three loss-making firms are underneath strain for a near-term turnaround.

GoTo’s primary focus is Indonesia, the place the digital financial system is forecast to develop practically 5 occasions present ranges, to as a lot as $330 billion, by 2030.

It boasts 2.5 million drivers, 14 million retailers and 55 million annual transacting customers, and 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 mentioned in a report, initiating protection with a goal value of 416 rupiah.

GoTo bought solely about 4% of its shares, with traders topic to an eight-month lock-in, or two years for these with a number of class voting shares. It is the primary to concern a number of class voting shares, profiting from new guidelines.

GoTo allotted shares to 600,000 drivers and mentioned a report 300,000 traders participated within the IPO.

($1 = 14,368.0000 rupiah)