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 startup 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 Series F financing round, which brings it total raise-to-date to over $3 billion.
For Facebook, which in April invested in India’s top telecom operator Reliance Jio Platforms, backing GoJek unlocks a similar opportunity: Helping millions of small businesses — while finding a business model for WhatsApp, an advertisement-free instant messaging service it owns that is used by more than 2 billion users.
Matt Idema, chief operating officer at WhatsApp, said the company will work with “indispensable” 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.
Indonesia is one of the biggest Asian markets for Facebook. In April, Reuters reported that the social juggernaut was in talks with local fintech firms to launch a mobile payments service in the country.
This investment paves the way for Facebook to expand its digital payment and financial services to Indonesia and more broadly to the Southeast Asian market, said Meng Liu, an analyst at Forrester. “The payment sector is still underserved and the opportunity in Southeast Asia’s emerging markets like Indonesia is worth billions of dollars. For GoJek, they will be able to embed Facebook’s digital wallet offering (like WhatsApp Pay) on their platform of lifestyle services across shopping, transport etc,” he said.
“Consumers who are underserved by traditional banks and card networks will have the chance to such digital payments offered by Facebook in the future. In the long run, if Facebook’s Libra (now called Novi Financial) plan is successful, there would also be a natural rollout of this inclusive cross-border payment offering to immigrant workers in the Southeast Asian markets as well. I see the deal as the first step to building the infrastructure to expand Facebook’s payment and fintech businesses in the region,” he added.
PayPal, which last year invested in money lender Tala ahead of the startup’s launch in India, said Wednesday’s commercial partnership will enable the global payments giant to “significantly grow” its scope and scale in Southeast Asia.
“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. The company, which competes with heavily-backed Singapore-headquartered Grab, said at the time that it had raised nearly $3 billion over the years.
“We have the opportunity to achieve something truly unique as we aim to help more businesses to digitise and ensure that many millions more consumers are enjoying the benefits that the digital economy can bring,” said Andre Soelistyo, who was appointed as co-chief executive of GoJek last year, in a statement. Gojek founder Nadiem Makarim resigns his top job at the firm to join Indonesian cabinet in October last year.