GoTo Seeks Indonesia IPO Valuing Firm at Up to $28.8 Billion
(Bloomberg) -- GoTo Group will push ahead with a stock-market debut in Indonesia valuing the ride-hailing, e-commerce and fintech company at as high as $28.8 billion, defying the sharp market downturn that battered its two main peers Sea Ltd. and Grab Holdings Ltd. in recent months.
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Jakarta-based GoTo, formed last year by the merger of Indonesia’s two most valuable internet startups, plans to raise about 18 trillion rupiah ($1.26 billion) in its initial public offering, according to a prospectus filing. It will sell as many as 52 billion new Series A shares at 316 to 346 rupiah each. That places its market valuation at $26.2 billion to $28.8 billion, it said in a statement.
GoTo would become the fourth-most-valuable company listed on the Indonesia stock exchange after PT Bank Central Asia, PT Bank Rakyat Indonesia and PT Telkom Indonesia at current price levels. The company aims to debut on April 4 after kick-starting a book-building process and taking investor orders for the offering this month.
The IPO will be a milestone for Southeast Asia’s biggest internet economy. GoTo was formed by the combination of ride-hailing giant Gojek and e-commerce firm PT Tokopedia. It is proceeding with its IPO plans despite tumult in global markets, including a sharp decline in tech stocks from the U.S. to China and Southeast Asia.
“This is the right time, given that we’ve got supportive investors, supportive market and the opportunity to do so,” President Patrick Cao said during an online media conference on Tuesday. “None of us can predict what’s going to happen to the market over the course of the next few weeks or months.”
Working for GoTo are a booming stock market and an economic recovery in the world’s fourth-most populous country. The benchmark index is hovering at an all-time high, in contrast to a selloff across Chinese equities.
Indonesia’s economy is picking up pace after emerging relatively unscathed from the latest virus wave, with the government forecasting 4.8% to 5.5% gross domestic product growth this year. People are already frequenting shopping malls and restaurants more than they did before the pandemic started, and more Indonesians are turning to digital modes of spending. In January, the value of electronic transactions surged 67% from a year ago, while digital banking activity climbed 63%.
Some existing shareholders have agreed to an 8-month lockup period, while GoTo founders won’t be able to sell shares for two years, according to the prospectus. The internet giant raised more than $1.3 billion in a funding round last year from investors including Fidelity International and Google.
The favorable Indonesian stock market, coupled with support from existing investors and young customers of GoTo’s services -- which also include food delivery and digital banking -- are helping the company to access the capital markets, Chief Executive Officer Andre Soelistyo said.
“In this IPO, it’s all new money, there is no existing shareholders selling,” he said. “Our capability to tap into the market will be much more dynamic and faster as a public company,” including the potential for a rights issue and a dual listing, he said.
The company is planning to offer a stake of as much as 10% in another share sale outside Indonesia, according to the prospectus. It’s still considering a listing in the U.S., Cao said.
“We need to see how the macro and market dynamics shake out over the course of the next few months,” he said. “Then we will be able to determine when we go ahead and do that dual listing.”
(Adds executives’ comments starting in fifth paragraph.)
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