Indonesian ride-hailing firm Go-Jek to invest $500 M on international expansion
Indonesian ride-sharing company Go-Jek announced on Thursday that it will invest $500 million in its international expansion strategy. The team said the company will foray into the Philippines, Vietnam, Singapore, and Thailand over the next few months, and that the company also intends to expand in Southeast Asia.
Initially, Go-Jek will start with its ride-hailing model in the newer geographies and then will look to replicate its multiple-service business model. A press statement shared by the company said Go-Jek is currently working with regulators and other stakeholders across the region to pave the way for its new forays.
Go-Jek will seek out local partners in the geographies it plans to foray in to ensure the new operations benefit from as much deep and varied market knowledge as possible.
The companies Go-Jek partners with will continue to be run their founding teams, and the former will provide technological support and expertise. The local companies will determine their own brands and identities to ensure good traction.
The planned expansion comes a few months after Go-Jek’s latest fund-raise of $1.5 billion. The fund-raise was one of Google’s direct investments in the Southeast Asia market. Other investors who participated in the round included Temasek, Tencent, Meituan, JD.COM and Astra International.
Go-Jek CEO and Founder Nadiem Makarim said:
“Consumers are happiest when they have choice and at the moment, people in Vietnam, Thailand, Singapore and the Philippines don’t feel that they’re getting enough when it comes to ride-hailing. We hope that as we arrive in new markets, we will quickly become everyone’s go-to lifestyle app. That is our aspiration. In the meantime, we hope our presence will provide the welcome competition markets need to thrive."
Go-Jek’s tech team is currently spread across India, Singapore and Indonesia. A Google-affiliated TechCrunch report in 2015 pegged Indonesia to be contributing more than 40 percent of revenue in Southeast Asia’s ride-sharing market.
Using the funding from the latest round, Go-Jek will focus on expanding services to capture this rapidly developing market, as well as fend off competition from the likes of Grab (which raised around $2.5 billion in funding in 2017) and Uber, which has pledged to invest aggressively in Southeast Asia, even though CEO Dara Khosrowshahi remains concerned about the region’s profitability.
“Our aim is to partner with countries and their governments to bring benefit to everyone who uses our technology, whether consumers looking for fast and competitive services, or drivers looking to secure additional income. Go-Jek has a positive impact on millions of people throughout Indonesia, and we want more people to share in that benefit,” says Nadiem.
Nadiem adds that the company believes the best way for it to expand internationally is by partnering with talented local teams who share its vision, and know exactly what will work best in their home countries. He added Go-Jek's role will be to act as advisors, giving new companies the benefit of the operational and development experience.
Since its launch in October 2010, Go-Jek has grown steadily, increasing its fleet and adding new features and offerings along the way. The firm started with just 20 riders, but rapid adoption by users saw its fleet expand to 800 riders within five years.
Today, the company has over 2,00,000 riders as part of its fleet, and offers a variety of services, including motorcycle taxis, Go-Auto (for mechanics on demand), Go-Car (a car-hailing service competing with the likes of Uber), Go-Tix (an event booking service), and Go-Mart (an on-demand shopping assistant), to name a few.
Go-Jek President, Andre Soelistyo, said, “Our most recent funding saw the addition of a significant number of strategic investors - both Indonesian and global. We are therefore confident that we have the support needed to take one of the most-amazing growth stories in the world from being an Indonesian phenomenon to a regional one.”