Facebook, PayPal Back Gojek’s Asia Digital Payments Push

Facebook Inc. and PayPal Holdings Inc. are investing in Gojek, a big boost for the Indonesian startup’s digital payments business that propels the U.S. companies into a fast-growing Asian internet arena.

It’s the second international investment Facebook has made in the past six weeks with a goal of getting more local businesses online, after the social media giant paid $5.7 billion for about 10% of India’s Reliance Jio. It plans to build a commerce and payments business around WhatsApp, on top of letting businesses use the messaging service to interact with customers.

The deal announced Wednesday marks Facebook’s first investment in an Indonesian company and is a major boost for the country’s largest startup, a ride-hailing giant that’s morphed into a provider of services like payments and meal delivery. Gojek is now backed by some of the world’s largest internet companies from Alphabet Inc.’s Google to China’s Tencent Holdings Ltd., helping it compete against Singapore’s Grab Holdings Inc.

“WhatsApp in particular can be instrumental in creating a more digital Indonesia by bringing more people into one of the fastest growing digital economies in the world,” WhatsApp Chief Operating Officer Matt Idema said in a blog post. The company didn’t specify how much it is investing and a spokesperson declined to share details.

Indonesia is one of the world’s most promising internet markets, fueled by rapidly expanding smartphone adoption and economic growth. It’s the largest country in Southeast Asia, anchoring a regional internet economy estimated at more than $100 billion in 2019 and tripling by 2025. Facebook and PayPal join Google and other U.S. corporations in staking out a relatively undeveloped Asian digital payments arena outside of China.

Southeast Asia Rising

Indonesia is the biggest contributor to the internet economy’s growth in the region

Facebook and PayPal joined Gojek’s current funding round, which closed at $1.2 billion around March at the height of the coronavirus pandemic.

Gojek and Grab aim to become Southeast Asian consumers’ default, all-purpose app, similar to Tencent’s WeChat. Gojek has drawn hundreds of thousands of merchants to its platform, providing them with access to more than 170 million users across the region.

The Indonesian startup, whose backers also include Singaporean state investor Temasek Holdings Pte, has said it will deploy fresh capital to keep expanding despite global economic turbulence. It recently acquired a mobile point-of-sale startup called Moka for about $130 million, people familiar with the deal have said.

Gojek, which debuted an app for hailing motorbike taxis in Jakarta in 2015, now also offers a score of other on-demand services such as house cleaning and medicine delivery, and was last valued at $10 billion according to CB Insights.

“We see our role as a convener of global tech expertise, facilitating collaboration that will ultimately lead to a better future for everyone in our region,” Gojek Co-Chief Executive Officer Andre Soelistyo said in a statement.

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source: Bloomberg

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