Grab, Gojek said to close in on terms for Southeast Asia’s biggest internet merger
- Singapore-based Grab was last valued at more than US$14 billion, while Indonesia’s Gojek is valued at US$10 billion
- Grab and Gojek have been locked in a fierce, expensive battle for dominance in ride-hailing, food delivery and mobile payment services
Representatives of Grab, Gojek and SoftBank declined to comment. The talks are still fluid and may not result in a transaction, the people said. The deal would need regulatory approval and governments may have antitrust concerns about the unification of the region’s two leading ride-hailing companies.
Grab and Gojek have been locked in a fierce, expensive battle for dominance in that business, along with food delivery and mobile payment, over the past several years. Investors have been pushing for them to combine forces across Southeast Asia to reduce cash burn and create one of the most powerful internet companies in the region.
Grab, which is present in eight countries, was last valued at more than US$14 billion, while Gojek, valued at US$10 billion, has presence in Indonesia, Singapore, the Philippines, Thailand and Vietnam.
SoftBank has been pushing for a deal since Son visited Indonesia in January, but he has grown increasingly frustrated with the lack of progress. The old rivalry and personality clashes between the two companies’ leaders have led to deadlocked negotiations in the past, according to one of the people familiar with the talks.
Gojek’s Nadiem Makarim sees success from trusting the numbers, hyper-experimenting and luck
Sea’s surprise journey from a scrappy start-up to Southeast Asia’s most valuable company in the past 10 years has been the “biggest inspiration” for local internet companies lately, said Rohit Sipahimalani, chief investment strategist at Temasek Holdings, in an interview at the launch of the e-Conomy SEA 2020 report in November. Sea went public in 2017 after raising more than US$720 million from investors and now has a market value approaching US$88 billion.
“People are now seeing that the public markets are a viable alternative for internet companies in Southeast Asia,” said Sipahimalani, whose firm is an investor in Gojek. “But they also recognise that they need to get to a certain scale, which is why the IPO route is becoming more attractive. I think that’s leading to some dialogue around combinations and consolidations in the region.”
He declined to comment on the Grab-Gojek deal, adding that Singapore’s state-owned investment firm is not taking part in the negotiations.