[Funding Alert] Against all odds, Gojek raises $1.2B to lock horns with Grab

Indonesian ride-hailing startup Gojek raised $1.2 billion in its latest round of funding, the process of which started last week, and is yet to close. However, they did not disclose the investors who participated in the funding round.

According to an internal memo shared by the co-CEOs, which was later reviewed by Reuters, the startup said that it continued to raise funds despite the challenges like an economic slowdown and the outbreak of the coronavirus pandemic. With this fundraise, the total valuation of the unicorn shoots up close to $10 billion.

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According to Bloomberg, co-CEOs Andre Soelistyo and Kevin Aluwi told employees in the internal memo,

"We’re not stopping there as we are still seeing strong demand among the investment community to partner with us. There are a number of exciting ongoing conversations that we will be able to update you on very soon."

Over the last few weeks, there had been numerous talk around the possible merger between Gojek and its only rival Grab, which received some protest. The Indonesian Consumers Foundation (YLKI), as reported by the country's media publication Bisnis, expressed its concerns over the pricing structures in the prospective monopoly in the ride-hailing sector, if the merger was to happen.

It is reported that Tulus Abadi, the chair of YLKI said, "The risk of violating consumer rights will be very large because there is no more opportunity to choose. There is only one price and no competition."

Ever since the company's ex-CEO Nadiem Makarim left the company in October last year, and joined the Indonesian government as the minister for education and culture, there have been reports of the merger between the mega-rivals. It was even speculated that Gojek wanted 50 percent of the shareholdings after the merger, while Grab wanted 100 percent control.

While Gojek denied the speculations and said that there are no possibilities of a merger, this announcement puts the rumours to rest. With this funding, the total amount raised gets close to $3 billion and subsequently put Gojek in a stronger position while the startup strengthens its attempts to go beyond being a super app.

As of February last year, Gojek raised $2 billion funding in its Series F round, at a valuation of $9.5 billion. The first close of it was at $920 million, which was led by Google, Tencent and JD.com. The round also saw participation from Provident Capital and Mitsubishi Corporation.

With that financing round, the startup went on to deepen its business penetration in homeland Indonesia, while growing its presence across markets in Singapore, Thailand and Vietnam. Gojek also entered Philippines with that round.

Reports state that the ride-hailing sector in Southeast Asia is set to become a $20.1 billion market by 2025, going up from $5.1 billion in 2017.

(Edited by Kanishk Singh)