INSUBCONTINENT EXCLUSIVE:
Southeast Asian on-demand transport startup Gojek denies that it is involved in talks to merge with Grab
stoke the fires of speculation that it is indeed gearing up for a deal.Grab said that it has raised $856 million more in funding in two
tranches from strategic Japanese investors
Grab did not disclose its valuation with the latest investments.The news comes directly on the heels of rumors that Grab is in talks to
merge with its big regional rival, Gojek
Gojek has denied the reports directly to A Technology News Room, while Grab declined to comment (but pointedly did not deny) although a
tension at the firm, the source said
The tension escalated after GoJek failed to secure new funds from SoftBank, the talks of which have not been previously reported, the source
operates when it requires a banking partnership for payments or other financial services.The second tranche is coming from TIS INTEC, an IT
solutions business out of Japan, which is putting in $150 million along with a strategic deal to help Grab develop the infrastructure needed
to run is growing financial services business, starting with digital payments by way of GrabPay.Both deals are important not just for Grab
but its new investors, which are looking for more opportunities and customer channels into a wider region of Asia beyond their common home
consumers to both see to their transportation needs, but also other aspects of their connected consumer life, such as eating, entertainment
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development looks like it may have been precipitated by the report that surfaced on Monday from The Information, which reported that it is
in merger discussions with Gojek, a ride-hailing business based out of Indonesia and also a big player in on-demand transportation and
comment on market rumors and speculation.A merger is one possible solution to the costly rivalry being waged by the two companies in
Southeast Asia and the statements may be an effort to ward off attention before a deal nears completion.With a $14 billion valuation and
investors including SoftBank, Uber and Didi Chuxing, Grab is the larger company, but it competes head-to-head in Indonesia with Gojek, which
has financial backing from Tencent, Google and Visa, among others
Both companies have expanded beyond ride-hailing into a wide range of services, including food deliveries and payments, through their
apps.The logic here is that while ride-hailing has proven to be a very popular business (both in terms of attracting drivers and passengers
largely because the operational costs needed to build and run these kinds of businesses are just too high when you take into account the
competitive landscape.The biggest companies in the space, such as Uber, have reported billions of dollars in operating losses, leading them
a need that investors would have eventually called in, after handing over billions in funding and waiting for many years to get a return
And that, most likely, is why we are now hearing about deals like this and will probably hear about more in other regions, too.According to
the Information, executives from Gojek and Grab have met occasionally over the past several years and began to discuss a merger more
with Grab telling its major investors that Gojek wants its shareholders to hold 50% of its combined Indonesian operations, and wish to avoid
to go out for more funding or if either companies will look for other strategic partners
One thing is certain: the bigger consolidation trend does mean the field of players is getting smaller.If they agree to merge, the two
