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Go-Jek receives backing from Mitsubishi companies

Industry majors jostle for a slice of Southeast Asian market

Go-Jek's latest investment from Mitsubishi Motors is an indication that its battle with Grab is increasingly taking on the characteristics of a proxy war between bigger international rivals. (Photo by Ken Kobayashi)

JAKARTA -- Indonesian ride-hailing company Go-Jek announced Monday it received investments from three companies under Japan's Mitsubishi group, giving it further ammunition in its battle with Singapore-based Grab for dominance in the Southeast Asian market.

Shares in U.S. peers Uber Technologies and Lyft may have flopped upon listing recently, but Southeast Asia still remains an attractive investment for global companies, as they aim to tap into the region's growing web-based economy.

Mitsubishi Motors, Mitsubishi Corp., and Mitsubishi UFJ Lease & Finance have all taken a stake in the Indonesian startup, although the value of the deal was undisclosed. Mitsubishi Corp. had already invested in Go-Jek in February along with existing shareholders Google, Tencent Holdings and JD.com, pushing Go-Jek's valuation to close to $10 billion.

"Bringing Mitsubishi Motors and Mitsubishi Corp.'s long and strong presence and brand power in Southeast Asia, as well as Go-Jek's diversified and unique business potential together, we foresee the creation of large synergies and innovation that will boost the growth of the three parties," said Mitsubishi Motors Chairman Osamu Masuko. "We believe that the accumulation of expertise in new mobility services that are rapidly spreading in the region and the opportunity to enter the market will contribute to the growth of Southeast Asia."

Uber and Lyft's lackluster initial public offerings in March and May respectively on the back of their huge operating losses raised doubts about investing in such companies, but investors seem to believe Go-Jek and Grab can buck the trend. Both have quickly evolved into super apps that offer a range of services on their platforms, giving them more revenue streams.

They are also well-positioned to capture the fast-growing Southeast Asian internet economy, which is expected to balloon to $240 billion in 2025 from roughly $72 billion in 2018, a report from Google and Temasek showed.

Grab is also on a fundraising mission of its own, aiming to raise $6.5 billion in total this year. In the latest round in June, it received $300 million from Invesco of the U.S. Grab is valued at $14.3 billion, according to CB Insights.

Go-Jek's latest investment also shows that bigger technology companies are jostling for power in the region. Grab counts Microsoft as an investor, while Google has thrown its weight behind Go-Jek. The fight is also between Chinese internet giants. While Tencent and JD.com are invested in Go-Jek, Grab has the backing of China's largest ride-hailing service Didi Chuxing.

Grab is also close to Alibaba Group Holdings through its affiliation with Japan's SoftBank Group, so much so that there were reports earlier this year that Grab was in talks with Alibaba's Ant Financial and PayPal to spin out its financial services unit.

For Mitsubishi Motors, the investment in the Indonesian startup will pit it against Japanese rivals Toyota Motor and Honda Motor, which are Grab investors. But Go-Jek is also backed by Astra International, an Indonesian conglomerate and Toyota's partner in Southeast Asia's biggest economy.

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