JAKARTA (TheInsiderStories) – PT Astra International Tbk (IDX:ASII), the country’s largest automotive company, confirmed on Monday (12/01) that it has agreed to invest US$150 million or around Rp2 trillion in Go-Jek, the country’s largest home-grown ride-hailing company. The investment marked the initial step of the company to enter the digital business.
Astra looks to combine its expertise in the automotive industry with Go-Jek’s extensive consumer base. Astra said in a statement that as ‘national champion companies’ the two firms will explore cooperation in various areas, including in increasing productivity, stimulating non-formal economic activity into the formal economy, while supporting product and service innovations in new markets.
Currently, Go-Jek has more than 1 million drivers across the country, with 125,000 business partners and 30,000 service providers on the Go-Jek platform, providing various services, such as transportation, food delivery, courier and cleaning, services as well as a payment system.
Go-Jek’s ability to perform millions of transactions per month has lure market players’ interest (including that of Astra) in investing in the company. President Director of Astra Prijono Sugiarto said that Astra International will be happy to be part of Go-Jek’s amazing journey.
“Go-Jek is the main player in the country’s digital economy, and is under solid management. Astra hopes that the collaboration with Go-Jek will provide added value to Astra’s business and accelerate Astra’s initiative in the digital sector,” Sugiarto said.
Astra’s investment in the company was the latest in a series made by a number of investors. Earlier, internet giant company Google confirmed its own plan to invest in Go-Jek.
Djarum, another major local conglomerate, known for its portfolio in the tobacco business, has reportedly invested US$100-120 million.
According to reports from earlier this month, Google’s investment was made alongside China’s Meituan-Dianping and Singaporean sovereign fund Temasek. The trio were part of a final tranche of a US$1.2 billion round that Go-Jek began negotiating in April last year, with commitments from the likes of Tencent and JD.com in China. The terms value Go-Jek at around US$4 billion.
The new round of investments will allow the company to expand. Andre Soelistyo, GO-JEK Group president, said recently that this will be the year that Go-Pay moves beyond the Go-Jek ecosystem, providing a convenient, secure and reliable payment protocol, offline and online.
Go-Jek is yet to disclose how it would use the investment from Astra. However, most likely that the funds, along with funding from other investors would be used by the company to fund its expansion. The company is now in the transition from a simple ride-hailing app to a multi-patform technology group which would leads in payment service in the country.
In November last year, the introduced its Go-Bills service, a platform that can be used for numerous bill payments, including electricity and the national healthcare insurance system (BPJS Health). The platform can be accessed through Go-Pay.
The new platform will expand the existing ecosystem in Go-Pay services in providing cashless payments, in line with government’s effort to promote a cashless society.
Go-Bills currently teams up with state lender PT BNI Tbk to provide such services.
In mid-December 2017, Go-Jek revealed its decision to acquire three leading financial technology (fintech) businesses in order to reinforce its leadership in internet payment protocol.
The acquisitions bring together Kartuku, an offline payments processing company; Midtrans, the country’s online payment gateway; and Mapan, the leading local community group- based saving and lending network.