Go-Jek, the direct rival of Uber and Grab in Indonesia, has raised a ballooning $1.2 billion from Tencent. The report first appeared on TechCrunch quoting two sources close to the company. The valuation of the ride-hailing firm post this round is $3 billion. Other investors that pumped in the money aren’t known but reportedly existing investors had also participated. The company is slated to make a formal announcement soon.
Prior to this, Go-Jek had secured $550 million in August 2016 at a valuation of $1.3 billion from the likes of Sequoia India, Northstar Group, DST Global, NSI Ventures, Rakuten Ventures, Warburg Pincus, among others.
Go-Jek claims to have more than 200,000 drivers across 25 cities in the nation. With the capital, it aims to fiercely compete against Uber and Grab on driver and passenger subsidies, work more on its mobile payment business. The report says it also plans to extend its services business, which will enable users to avail more services such as shopping, massages and others on demand.
The rivalry in the ride-hailing industry is no more region restricted, the firms are competing in their home markets and are expanding to other countries as well. Go-Jek has been operating in Indonesia since its inception but after this funding, it is seeking to step into other nations of Southeast Asia.
The region, as of now, is dominated by Uber and Singapore-based Grab. Both the firms are constantly upping their ante to outdo each other. Uber has added $8 billion to its coffers till date with a valuation of over $60 billion. It runs its business in Indonesia pretty decently, and there was a possibility that it was mulling to ink a non-compete deal with Go-Jek.
This simply meant that the former would stick to running its cab-hailing business, while the latter will oversee operations of the bike-hailing market. But, the agreement did not go through, when Uber’s CEO Travis Kalanick came to know. Apparently, the reason was that the company did not want to miss out on any business opportunity.
On the other hand, Grab had raised $750 million at a valuation of $3 billion from SoftBank in September last year. Reports suggest it is in process of raising another round of $1.5 billion. Grab, debuted in Indonesia in 2014 and maintains a very strong foothold in Indonesia. It had recently committed $700 million for ‘Grab 4 Indonesia’ 2020 master plan‘ under which it plans to invest the capital in a period of over four years and took over Indonesian O2O e-commerce startup Kudo marking the first investment.