Well, things are like really heating up for Uber in Southeast Asia. After the recent Uber China acquisition by Didi Chuxing, Indonesia based motorbike taxi aggregator Go-Jek has raised a massive $550 million fund towards fueling its expansion in Southeast Asia.
Considering that the company is a direct competitor to Uber and Grab, who are trying to obtain a foothold in the region, the news is not likely to be greeted with enthusiasm by either.
Apart from participation from multiple existing investors — including Sequoia India, Northstar Group, DST Global, NSI Ventures, Rakuten Ventures and Formation Group — the round also saw multiple new investors such as KKR, Warburg Pincus, Farallon Capital and Capital Group Private Markets, pump money into the company.
The company is ahead of Uber and Grab as far as two wheeler taxis are concerned — considering that motorbike taxis are its primary product, as compared to Uber and Grab who are relatively new come to the niche — and will deploy the funds to further entrench its position. Apart from taxi services, Go-Jek also offers a pretty large assortment of other services that include food delivery, massage, bus and courier. As per the company, the number of drivers associated with it may be as high as 200,000, while it is supposed to have over 35,000 food delivery partners and 3,000 service providers on board.
The company’s stronghold is in the Indonesian capital of Jakarta, which is known to be a commuters nightmare during peak hours. The busy traffic provides Go-Jek with plenty of business and the company claims to have reached over 20 million app downloads,
Speaking about the funding, Nadiem Makarim, CEO and co-founder of GO-JEK said,
We are extremely humbled and excited to work with such world-class partners. KKR, Warburg Pincus, Farallon, Capital Group and other participants in this fundraise not only bring global experience in the TMT sector, but they are also experienced local partners.
Meanwhile, Jeffrey Perlman, head of Southeast Asia for Warburg Pincus, said,
With a rapidly expanding middle class, increasing urban density and a young demographic that is internet savvy, GO-JEK is well positioned to become the ‘go to’ platform for high frequency daily services including transport, food, logistics and payment
The dynamics of these services — and particularly the whole taxi/cab aggregator landscape — has suddenly become very interesting in Southeast Asia. After Didi Chuxing ended the ongoing battle between itself and Uber China by purchasing the latter, Uber was freed to divert its attention from China to focus upon other bustling markets in the region. However, Go-Jek’s fundraising coming at this particular point in time, is bound to have raised the stakes.
Meanwhile, rival cab aggregator Grab is also known to be nearing a round of fund-raising that has seen significant participation from Didi and Softbank, further tangling things up. The round is expected to exceed half a billion dollars and will grant Grab significant resources in its battle for the Southeast Asian markets.
Well, cab aggregation has certainly become a very interesting space in the region. While Didi Chuxing has managed to get Uber off it’s back by paying out $35 Billion, that is probably not going to be an option for Grab or Go-Jek. Southeast Asia is very likely to witness an interesting battle between all these companies in the coming months.
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