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After WeWork flop, Indonesia's Gojek eyes dual listing

Unicorn moves on from charismatic leader, heavy promotions and cash burning

Commuters pass by a Gojek advertisement in Singapore. The startup aims to be a Southeast Asian "super app" that lets users hail rides, make payments and more.   © Reuters

JAKARTA -- Indonesian ride-hailing startup Gojek likely will seek a dual listing when the company makes an initial public offering, co-CEO Andre Soelistyo said on Oct.24.

The primary listing will be in the home country, Soelistyo told media including the Nikkei Asian Review, as Gojek wants to provide "the opportunity for Indonesian investors to participate."

A secondary listing will be made elsewhere "if opportunity permits," he added, without identifying a preferred market or a time frame for going public.

Soelistyo took the co-CEO position, along with Gojek co-founder Kevin Aluwi, after former CEO and co-founder Nadiem Makarim was appointed as Indonesia's education minister on Oct. 23.

Gojek becomes the second Indonesian unicorn -- private companies worth more than $1 billion -- to look for a dual listing after e-commerce company Tokopedia, which is backed by Japan's SoftBank Group.

The debate comes as multibillion-dollar tech startups around the world face greater scrutiny on profitability as they weigh when and how to go public.

For many of Gojek's products, with "every transaction now we make money," co-CEO Andre Soelistyo says. (Photo by Shotaro Tani)

In an interview with Bloomberg this month, Tokopedia founder William Tanuwijaya said a dual listing "is most likely to be our approach."

A dual listing represents a natural course for Indonesia's two most successful startups, as the country's stock exchange lags in market size and liquidity compared with regional rivals like Singapore's. Gojek is Indonesia's first decacorn, a private company valued at over $10 billion.

Gojek remains confident in its future IPO, even as investors grow wary of tech companies going public after the WeWork fiasco deflated valuations in the sector.

"Obviously we are cognizant about what is happening in the world," Soelistyo said. Gojek, with 29.2 million monthly active users in Indonesia alone and 36.3 million across Southeast Asia, has, in his words, made "significant progress" on business sustainability to be ready for an IPO.

"Many of our core products in Indonesia have gone into positive contribution margin, which means every transaction now we make money," the co-CEO said.

Gojek is moving away from the model of heavy promotions and cash burning that the company deployed in its battle with Singapore-based rival Grab, he said.

Instead of providing indiscriminate discounts to draw new customers, Gojek has begun to offer vouchers.

"Maybe someone is a heavy [food delivery] user but never uses transport," Soelistyo said. "We will actually target you to be a transport user, so we give you vouchers. It is very targeted."

"We have launched things like bundles, where you can buy multiple trips [and] subscriptions that give you multiple orders," he said. "A lot of this is meant to experiment on what sticks to the consumer side -- most importantly, what will be more efficient to move the users to different dynamics."

Gojek is on track to reach its target of raising $2 billion by the end of this year in the Series F round, Soelistyo said. Existing investors like Google, China's Tencent Holdings and local conglomerate Astra International have taken part, along with a trio of Mitsubishi companies: Mitsubishi Motors, Mitsubishi Corp. and Mitsubishi UFJ Lease and Finance. The state-backed Cool Japan Fund invested $50 million in Gojek this month.

The Indonesian company began as a call center for ojek bike taxis and debuted an app in 2015 focused on ride hailing, personal shopper services and deliveries. The app quickly caught on, and the company now offers services ranging from payments to food deliveries and even on-demand massages. This "super app" model has been so successful that U.S. company Uber Technologies, which pioneered ride hailing, is adopting the approach.

The departure of Makarim for the education minister post has not disrupted business, co-CEOs Soelistyo and Aluwi say.

"Decision making when Nadiem was here was very much shared," Aluwi said.

Structures are in place for succession planning at all levels, he said, and "we feel very confident with the people we have, the process and the teams that we have, that should anyone decide to leave or [we] have to reorganize, we are well prepared."

Yet as Gojek approaches the transition from a startup to "an enduring company," Aluwi said, he and Soelistyo will take different approaches than Makarim.

"I think Nadiem is definitely the mercurial, charismatic leader type," Aluwi said. "I think what we bring to the table is a much more measured approach."

Though he still considers Gojek to be a "growth company," Aluwi said the co-CEOs will be "a lot more process driven, to really focus the company on the right things versus probably too much experimentation in adjacent things."

"It has nothing to do with Nadiem as a person," Aluwi said. "I do think that his style was the right style for the right time. But now we are in a different time, and we will operate appropriately."

Additional reporting by Ismi Damayanti in Jakarta.

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