Indonesia's Telkom in talks to buy stake in Go-Jek

Negotiations come amid ride-hailing firm's plans to expand in region, including S'pore

Just before Go-Jek launches its ride-hailing service in Singapore and goes head-to-head with Grab in the region, it may have found another investor to lend it even more financial muscle.

Indonesia's largest telecommunications services provider Telkom is in talks to buy a stake in Go-Jek, which began its business as a ride-hailing company in Jakarta.

The talks come as Go-Jek is gathering pace to expand in South-east Asia, starting with Go-Viet in Vietnam and GET in Thailand.

It is also looking to move into the Philippines and Singapore, where it will face off against Singapore-based Grab.

On Tuesday, Go-Jek started signing up pre-registered drivers en masse in Singapore, but it is still not saying when it will officially start offering its services.

The Straits Times understands that it is aiming to start in January, later than the third week of November it had initially planned for.

According to reports in September, the Jakarta-based ride-hailing and logistics services company, which has also expanded into the e-money business, has been in talks to raise at least US$2 billion (S$2.75 billion) to expand its business in the region and fight Grab.

Currently, Go-Jek's investors include Tencent Holdings, Warburg Pincus, Google and Temasek.

Early this year, Astra International - an Indonesian conglomerate that operates the country's largest auto-assembler and owns a range of other businesses from coal mining to banking - invested US$150 million in Go-Jek.

According to a source with knowledge of the plans, if the deal goes through, Telkom may spend four trillion rupiah (S$375 million) to buy a minority stake in Go-Jek.

The telco had 13.67 trillion rupiah in cash at the end of September, according to its latest financial statement.

Telkom owns 65 per cent of Indonesia's largest mobile phone operator Telkomsel, which had 196.3 million subscribers nationwide at the end of last year. Singtel owns 35 per cent of Telkomsel.

Both Go-Jek and Telkomsel have significant presence in Indonesia's e-money industry, using their brands Go-Pay and TCash respectively.

When contacted on Wednesday, Telkom declined to comment.

In September this year, Go-Jek launched Go-Viet. It provides motorcycle ride-hailing and goods delivery services in Hanoi.

On its plans for Singapore, a Go-Jek spokesman confirmed that early-stage driver on-boarding has begun and it is working towards the launch of its beta app within the next few weeks.

Separately, Grab announced yesterday a remittance offering that will allow both banked and unbanked users to remit money instantly and securely to receivers in another country using their GrabPay wallets.

The remittance product, which was unveiled at the 33rd Asean Summit, will be launched early next year.

In contrast to existing options in the market, receivers can access transferred funds instantaneously, said Grab, calling the offering the region's first wallet-to-wallet remittance product.

Receivers can either choose to cash out the remitted amount via the regular network of cash-out points or use it on everyday transactions via their GrabPay wallet.

Grab said the remittance offering will also pave the way for a multi-currency Asean travel wallet.

  • Additional reporting from The Business Times