Indonesia's Telkom in talks to buy stake in Go-Jek as ride-hailing firm pushes ahead with expansion plans

JAKARTA -  Just before technology start-up 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 telecommunication services provider Telkom is in talks to buy a stake in Go-Jek, which began its business as a ride-hailing firm in the Indonesian capital of Jakarta.

The talks come as the firm is gathering strength 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 (Nov 13), Go-Jek started signing up pre-registered drivers en masse in Singapore, but it is still not saying when it will officially start 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.

According to reports in September 2018, 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 Holdings.

 
 

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

Telkom, according to a source with knowledge of the plans, may spend four trillion rupiah (S$373 million) – if the deal goes through – to buy a minority stake in Go-Jek.

Telkom had 13.67 trillion rupiah in cash at end-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 end-2017.  Singtel owns 35 per cent of Telkomsel. Both Go-Jek and Telkomsel have significant presence in Indonesia's e-money industry, using their brands GoPay and tcash, respectively.  

When contacted on Wednesday, Telkom’s head of investor relations Andi Setiawan and the head of corporate communications Kristy Nelwan both declined comment.

Go-Jek marked its first move into international operations in September 2018 with Go-Viet, which provides motorcycle-hailing and goods delivery services in Hanoi.

The firm is finalising plans to enter Thailand and the Philippines, moves it first announced in late May.

On its plans for Singapore, a Go-Jek spokesman said on Wednesday: “We can confirm that early-stage driver on-boarding has begun as we work towards the launch of our beta app in Singapore within the next few weeks.”