A Gojek driver checks his cell phone in Jakarta, Indonesia on January 5, 2021.

Dimas Ardian | Bloomberg | Getty Images

The Indonesian hail and payment company Gojek announced on Monday its merger with the e-commerce provider Tokopedia to form the GoTo Group.

Without disclosing the value of the deal, Gojek said the deal was the country’s biggest deal. The ultimate goal is to be a potential IPO with an expected valuation target for the public markets of between $ 35 billion and $ 40 billion, Bloomberg reported in February.

The new company will be led by Gojeks Andre Soelistyo as Group CEO and Patrick Cao from Tokopedia as Group President. Kevin Aluwi remains CEO of Gojek and William Tanuwijaya will continue to lead Tokopedia. Soelistyo will also lead the payments and financial services division, which will be renamed GoTo Financial.

The merger is likely to help Gojek and Tokopedia acquire larger regional competitors like Singapore-based digging and internet company Sea, which operates the Shopee e-commerce platform and has a digital payments and financial services business. Sea has a market value of more than $ 112 billion.

Last month, Grab announced a nearly $ 40 billion SPAC merger to go public on the Nasdaq.

The GoTo Group will combine e-commerce, on-demand and financial services from Gojek and Tokopedia. In 2020, their combined transactions were more than $ 1.8 billion and their gross transaction value was over $ 22 billion. The companies combined have more than 100 million monthly active users.

“Our business model is now even more diverse, stable and sustainable,” said Cao, president of the GoTo Group, in a statement. “We have Gojek’s high-volume, high-frequency mobility transactions combined with Tokopedia’s high-quality, medium-frequency e-commerce transactions. The GoTo Group will account for more than 2% of GDP in Indonesia.”

Soelistyo said Gojek drivers will deliver more packages from Tokopedia, while the two companies will use their combined scale to focus on increasing financial inclusion in the region.

The group is backed by prominent investors who have previously invested in Gojek or Tokopedia, including Alibaba, Tencent, Sequoia Capital India and Singapore state investor Temasek.