Telkomsel, Indonesia’s biggest telecom network, has invested $150 million in ride-hailing firm GoJek, the two companies said on Tuesday.
As part of the “strategic partnership,” the two firms said they will explore a “broad range of collaboration opportunities” to reach millions of Indonesians. Since 2018, GoJek and Telkomsel have maintained a deal to subsidize the cost of mobile data consumed by the ride-hailing firm’s driver partners.
With over 170 million subscribers, Telkomsel is the largest telecom operator in Indonesia. In addition to ride-hailing, GoJek has expanded to several additional businesses including digital payments and food delivery in Indonesia.
The firm, which has raised over $3 billion to date and was valued at about $10 billion earlier this year, is backed by some of the biggest names in tech including Facebook, Google, PayPal, and Tencent. GoJek, which also serves about 170 million users, competes with just as heavily backed firm, Grab.
“This is a great day for Gojek and for Indonesia, as we strengthen our collaboration with Telkomsel, one of Indonesia’s most forward-looking telecommunication companies. By working together, we hope to help Indonesia become a true digital powerhouse in Southeast Asia, and bring the benefits of the digital economy to millions more consumers, driver-partners and small businesses,” Gojek co-chief executive Andre Soelistyo said in a statement.
Melisa Irene‘s path to becoming a partner at one of Southeast Asia’s most esteemed venture capital firms is an unconventional one.
“I always consider myself to be quite lucky,” said Irene, who was promoted to be a partner at East Ventures in January 2019. At 25 years old, she was the Jakarta-based investment firm’s first female partner.
During TechCrunch Disrupt’s first online conference, I spoke to Irene about what she humbly described as a “lucky” career, her experience as a young, female investor, the rush of American and Chinese VC money into Southeast Asia, and what the COVID-19 pandemic means to East Ventures . A video recording of the conversation is at the bottom of the article.
Partner at 25
Irene admitted that timing played a big part in her ascension in the VC world. The development of Indonesia’s internet infrastructure came around relatively late — around 2010 — compared to more developed markets, but growth happened rapidly. In 2015, five years after East Ventures backed the Series A of Tokopedia, now an e-commerce leader in Southeast Asia, Irene joined the firm.
In those days, “I didn’t compete with a lot of investment bankers,” said Irene, who majored in accounting in university and began as an intern at East Ventures. “The capability that they looked for was how fast you can immerse in the ecosystem.”
Contrary to popular belief, the Southeast Asian investment ecosystem is “quite friendly” towards women. “People rejoice the promotion of female professionals in this industry. It’s not a rare circumstance to see females becoming a vice principal or principle in Southeast Asia,” the investor said.
The support goes beyond simply checking the gender-diversity box and reflects a real demand for more empathetic investors in the tech industry.
“Sometimes people like to talk as a business partner and sometimes as a friend. [Empathy] is something that can be seen as natural coming from females,” she added.
However, the investor cautioned that “the number of [female] decision-makers definitely needs to improve,” though she foresees the local ecosystem “is supportive of that.”
SEA gold rush
In recent years tech giants from both the U.S. and China have been clamoring to get into Southeast Asia, a region home to about 670 million people and a fledgling internet market. They often begin by financing local upstarts, which, beholden to the investment, will provide directional advice to their foreign corporate investors.
When offered big checks, startups must stay level-headed and think what’s best for them, Irene advised. “The thing is everyone has money. Companies need to decide which side to be on, what companies they want on board, and what companies are able to give them strategic advice.”
It’s not uncommon to see investors and founders clash over priorities. Some investors want a quick exit, while the entrepreneurial mentality is to build a business in the long run. “That’s why alignment is important,” asserted the investor.
The future of tech in SEA
As unicorns and “super apps” like Grab and Gojek emerge in Southeast Asia, concerns that incumbents can kill off competition grow. East Ventures has a unique insight into the region’s competitive dynamics as an early-stage investor that has seen some of its startups like Tokopedia and Traveloa grow into behemoths.
Irene believed as Southeast Asia’s internet ecosystem matures, there are actually a lot of opportunities for startups in “upcoming sectors.”
“If you look at the unicorns, you see a lot of younger and smaller companies supporting them,” she said. The point is that giants can’t accomplish everything by themselves, and some of the more niche functions can best be tackled by smaller players with specialized focuses.
On the other hand, the investor believed consolidation is possible — and should happen — in areas that can benefit from scale and network effects.
“People think of Indonesia as one country. We are not. We are the largest archipelago, which means there are very different infrastructures within different provinces. For example, it’s expensive to set up a bank branch in a small island… That means a lot of things need to come into a collective effort and one big ecosystem to offer the consumers with different kinds of offerings.”
Lastly, there’s the inevitable question of COVID-19. Like many investors, Irene saw a silver lining during the dark times.
“Before COVID, it was very difficult to assess the quality of companies. They all had a lot of money and the infrastructure was actually good… Now we suddenly can tell who makes good decisions, who makes it at what speed, and what is the outcome of those decisions. The way entrepreneurs respond to COVID can tell us a lot about their enterprises.”
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.
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On the podcast this morning:
Stocks are set to open sharply higher as we hit record, a good and welcome comeback for investors in both private and public tech companies.
In a statement, the company said Rault will oversee Gojek’s engineering teams in Southeast Asia and India and report to co-chief executive officer Kevin Aluwi.
Rault has a long history of leading engineering teams at large tech companies, as well as his own startups.
Before joining Gojek, Rault worked at Betawave, a virtual reality studio he founded in 2016. During his stint at Amazon, Rault was one of the founders of Prime Air, the company’s drone delivery program. At Microsoft, he was the principal architect of Bing, the company’s search engine. Rault’s other experience include founding Kikker Interactive, a wireless solutions provider that was acquired by Microsoft in 2008.
Rault’s appointment comes at a critical time for Gojek as it faces competition from rival Grab and deals with the fallout of the COVID-19 pandemic. Last month, Gojek said it was laying off 430 employees, or about 9% of its workforce, and closing GoLife, its lifestyle services division, to focus on its core payments, transportation and food delivery businesses as part of its long-term response to the pandemic.
Founded in 2010 as a motorcycle ride-hailing company, Gojek has since transformed itself into a “super app” that offers online payments and a roster of on-demand services, including transportation, ecommerce deliveries and logistics. Gojek recently added Facebook and PayPal to a list of high-profile investors, including Google and Tencent.
Gojek disclosed in March that it is valued at $10 billion and now has over 170 million users, but it faces fierce rivalry from Grab, another Southeast Asian on-demand ride-hailing and logistics platform that is also building an online financial services business. With a valuation of $14 billion, Grab is the larger company. Earlier this year, reports emerged that the two were discussing a merger, which Gojek denied and Grab declined to comment on.
In statement, Rault said, “It is a time like no other to be at Gojek. The company is entering a critical phase as it moves from startup to maturation and it’s special to be a part of that. Building systems and processes for a business of Gojek’s scale and complexity is a challenge one rarely enjoys in their career and I’m grateful for the opportunity.”
Facebook and PayPal have made investments in GoJek, joining Google and Tencent among other high-profile technology firms that have backed the five-year-old Southeast Asian ride-hailing firm that also offers food delivery and mobile payments.
Facebook, for which it is the first investment in an Indonesia-based firm, and PayPal did not disclose the size of their checks. GoJek told TechCrunch that Facebook and PayPal were participating in its ongoing financing round, which brings it total raise-to-date to over $3 billion.
Matt Idema, chief operating officer at WhatsApp, said the company will work with “indispensable” service GoJek to “bring millions of small businesses and the customers they serve into the largest digital economy in Southeast Asia.”
“The majority of small businesses in Indonesia rely on cash to operate due to the country’s large unbanked population. Digital payments are safer than cash, both for businesses and customers. And digital payments help more people participate in the economy and give businesses access to credit which is crucial for business growth,” he wrote in a blog post.
“This new relationship is another positive step in our journey towards becoming the worldwide payments partner of choice, and helping to fuel global commerce by connecting the world’s leading marketplaces and payment networks,” PayPal said in a statement.
GoJek, which disclosed it had raised $1.2 billion in March to employees and was valued at about $10 billion, said it has amassed over 170 million users in Southeast Asia. In March, the company, which competes with Singapore-headquartered Grab, said it had raised nearly $3 billion over the years.
Opera’s Africa fintech startup OPay remains committed to building a multi-service super app in Nigeria as the foundation to expand on the continent.
OPay also continues to operate ORide for limited passenger service — though the company is shifting the motorcycle ride-hail operation toward logistics businesses.
These were some of the updates offered by Opera’s Derrick Nueman, a VP of Investor Relations and advisor to OPay.
He spoke to TechCrunch amid a flurry of recent reporting questioning OPay’s Nigeria strategy and speculating on its departure from certain verticals.
This is playing out in the context of fierce competition among fintech and mobility companies in the West African country. Nigeria is home to the continent’s largest economy, biggest population and is the top destination for VC to African startups, as of 2019.
Opera launched the OPay mobile money platform in Lagos in 2018 on the popularity of its internet search engine in Africa. A year later, the Norway-based, Chinese-owned company sent jitters through Nigeria’s startup world when it rallied investors to back OPay with $170 million in VC. The financing haul amounted to nearly one-fifth of all venture funding raised for African startups the previous year.
Image Credits: Opera
Opera tapped its capital to go work building a large suite of internet-based commercial products in Nigeria using OPay as the financial utility.
In a 2019 prospectus, Opera referred to this multi-product strategy as creating “Africa’s super app.” Pursuing that platform put OPay in competition with dozens of local startups — such as payment firm Paga and logistics venture Max.ng — without deep pocketed corporate parents.
Opera remains committed to the super app strategy, according to Derrick Nueman. He referred to OPay as “the glue that holds it all together and within there you can offer all sorts of products.”
Nueman compared the approach to other multi-service internet services models such as Grab or Gojek.
“It’s taking what has worked in Asia and and ascribing it to Africa and that to my knowledge is still the plan,” he said.
Opera has tested a number of services verticals in Nigeria. So many it’s been a bit difficult to keep track. A few — such as OBus — have already been jettisoned. Nueman confirmed a list of five current product offerings around Opay in Nigeria:
OMall, a B2C e-commerce app
OTrade, a B2B e-commerce platform
OExpress, a logistics delivery service
OFood, for restaurant delivery; and
ORide, a motorcycle ride-hail service
OPay — whose Nigerian country manager is Iniabasi Akpan — is also moving into device sales with Olla, a mobile phone line pre-loaded with its apps.
Image Credits: Opera
On ORide in particular, there’s been some speculation the motorcycle ride-hail service will continue, particularly after the Nigeria’s Lagos State severely restricted two wheeled, on-demand passenger services early this year. Nigerian outlet TechCabal reported this week ORide was selling off some of its fleet.
According to Opera’s Derrick Nueman, ORide still offers limited ride-hail taxi service. “On the passenger side, it continues to operate where it can.” Many of motorcycles are being transitioned to other functions within OPay. “What they’ve done is redirected a bunch of their drivers to do things like delivery and logistics,” said Nueman.
Several of ORide’s competitors — such as Max .ng and Gokada — have also shifted away from passenger transit and toward delivery logistics in response to regulatory restrictions on motorcycle taxis.
Opera still plans on taking its super app model on the road in Africa, according to Nueman. “OPay continues to look into other markets. The idea is to take what’s worked in Nigeria and export it,” he said.
In a 2019 release, Opera named Ghana, South Africa and Kenya as potential growth markets.
On timing for expansion, Nueman said it depends on obtaining proper licenses and then, gauging shifting variables related to COVID-19 in Africa.
The economic impact of the global pandemic has cast uncertainty over the continent’s largest economies and tech hubs — such as Nigeria, Kenya, South Africa — where lockdown measures have restricted startup revenues and operations.
On OPay’s plans to weather a stormy economic environment in its primary market, Opera’s Nueman points to the company’s VC coffers.
“At a high level, if you don’t need capital, or your well funded, you’re ahead of the game,” he said.
Nueman also highlighted the growth of OPay’s payment volume. “Between January and April…the offline and online transaction volume increased by 44%. So even in the lockdown, it’s doing really well.”
Where does this put Opera’s Africa venture in Nigeria’s competitive startup landscape? Traction with payment volume is obviously a good sign for the company. Still, recession and restricted movement could make business as difficult for OPay in Nigeria as its competitors.
Having more capital — and ability to endure a higher burn-rate — places OPay in a strong position vis-a-vis other startups. But it will take more time to determine if OPay can align its super app products to local consumer preferences as well (or better) than offerings by local tech companies.
As has been proven in other markets, all the VC in the world won’t necessarily buy product market fit.