GoTo soared as much as 23 percent in its market debut on Monday after Indonesia’s largest tech company raised $ 1.1 billion in a keenly watched IPO, fuelling expectations of more offerings to come from the sector in Southeast Asia’s largest economy.
The initial public offering (IPO) is the world’s fifth-largest this year, Refinitiv data showed, and went forward despite many IPOs across the globe being pulled due to the Russia-Ukraine war and rising interest rates.
PT GoTo Gojek Tokopedia Tbk was formed by last year’s merger of ride hailing-to-payments company Gojek and e-commerce leader Tokopedia, with its businesses straddling millions of small and mid-sized firms across 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 private equity banker who steered Gojek’s push into consumer services, told reporters.
GoTo’s shares rose as high as 416 rupiah minutes after the start of trade, compared with the 338 rupiah IPO price. Sold only to investors in Indonesia, unlike most other domestic offerings, the shares ended at 382 rupiah, up 13 percent.
The strong listing will boost tech giants backing GoTo, including SoftBank Group’s Vision Fund 1 and Alibaba Group Holding Ltd, which have been battered by the global market rout since late 2021.
It also affirms the attractiveness of Indonesia’s $ 70 billion digital market, where record venture funding is creating a wave of startups.
“GoTo’s IPO is a watershed moment for Indonesia,” said Joel Shen, head of Asia technology at global law firm Withers.
Indonesian startups also considering braving the market with IPOs include Binance-backed crypto firm TokoCrypto and online travel booking company Tiket.com, sources familiar with the matter told Reuters. The firms could not immediately be reached for comment.
“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 said.
STOCK MARKET BOOM
GoTo became Indonesia’s third most-valuable listed firm at $ 31.6 billion, along 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 said in a video message at the listing ceremony, which began with a video of GoTo’s leadership in Gojek driver uniforms riding electric motorcycles.
GoTo’s IPO benefited from booming equities, with Jakarta’s main index hitting a record on Monday and up 9 percent so far this year, making it Asia’s best performing market.
GoTo’s founders retained only a small stake after Gojek, Tokopedia and the combined firm raised $ 9 billion from investors including Alphabet’s Google, Tencent, Singapore state investor Temasek Holdings and the Abu Dhabi Investment Authority.
Sharp share price declines in U.S.-listed peers Grab Holdings and Sea, which operate across Southeast Asia, dampened GoTo’s valuation as it proceeded with the offering. All three loss-making companies are under pressure for a near-term turnaround.
GoTo’s main focus is Indonesia, where the digital economy is forecast to grow nearly five times current levels, to as much as $ 330 billion, by 2030.
It boasts 2.5 million drivers, 14 million merchants and 55 million annual transacting users, 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 said in a report, initiating coverage with a target price of 416 rupiah.
GoTo sold only about 4 percent of its shares, with investors subject to an eight-month lock-in, or two years for those with multiple class voting shares. It is the first to issue multiple class voting shares, taking advantage of new rules.
GoTo allocated shares to 600,000 drivers and said a record 300,000 investors participated in the IPO.
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