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Our ranking reflects the dominance of energy companies, the enduring profitability of Southeast Asia’s banks, shifting global supply chains, the steady rebound in tourism, and the rapid ascent of AI-driven businesses in the region.

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CTW.1122. GoTo

<p class="p1">In April, when Indonesian super app GoTo raised $1.1 billion in a hotly anticipated IPO, the company made sure some proceeds went to the people that power its services. GoTo allocated $20 million worth of shares to 600,000 drivers who deliver food, groceries, and other products via GoTo in Indonesia, Singapore, and Vietnam. The program aimed to foster loyalty and a sense of ownership among GoTo’s driver base. But it also boosted financial literacy and inclusion in Indonesia, a country that is one-third unbanked—enabling many drivers to engage with the financial system for the first time.</p>

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GoTo (GOTO): Company Profile, Stock Price, News, Rankings

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GoTo | Fortune

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Patrick Cao says Indonesia's "virtuous cycle" of GDP and consumption growth helped GoTo withstand the tech rout?

GoTo president: Indonesia's economy is "humming" 

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well, it's my pleasure to welcome Patrick style, the group president of go to one of Southeast Asia's most dynamic uh, new tech companies. Uh, and I want to thank him for joining this conversation which has been produced exclusively for Huawei and for the spark founder summit Pat joining us from Singapore and Pat, thank you so much for being here. Thank you Clay. It's a good team for inviting me. I wonder if we could start a little bit just having you reflect about the $18 billion dollar deal that created the go to group the murder of uh, media and go check. Um, that was a little while in the making. And I wonder if you could tell us how it happened and why these two companies decided they would be stronger together. It's quite a journey. So if we reflect back to 2020, it was the outset of Covid and at the time, you know, go jek encyclopedia being the local champions and also the technology companies with the largest distribution networks. We work together hand in hand to support the government, um, with their programs to support consumers with getting access to essential goods and services and merchants and driver partners with business continuity And after a few months of that and you know, really strengthening what was already a very close relationship, We were sort of joking around one night about, you know, whether or not it made sense for us to get, you know, we call it getting married. Um, and interestingly as we started to unpack that idea, it became, you know, more and more, it seemed more and more like a good idea. And so actually we went to our board on christmas Eve. So you can imagine my team surprised, you know, when I called him after that, you know, the day before christmas and said to them, well, I've got a great christmas gift for you guys by the way. You know, we're going to merge these companies. Um, so it moved very quickly after that. So within two weeks we signed a pretty detailed term sheet. Uh, we appointed Andrea's group ceo shortly after that. Uh, and then by May, you know, we were able to, to close the deal. And so I think, you know, those combination of things in terms of common mission and purpose, in terms of what we saw, we were able to do together, especially during such unprecedented times with persistent Covid made it very, very clear that this was a great idea. And I think, you know, a year and some into our marriage, it's been quite an adventure. You know, it's interesting to me that these two Indonesian companies ended up together because obviously you looked at a lot of different possibilities. Uh, you know, prior to this decision, you're about 90% of your revenue 95 or something like that comes from Indonesia if I understand correctly. And that's actually proved to be a really winning proposition for you at a time when the Indonesian economy seems to be doing pretty well. Um, how did you, how did you think about that when you were buying the murder? I mean, I think the context of how we both started our companies individually matters. So I think given we were both fortunate enough to start and grow in such a large market, right, fourth largest population in the world. Um that makes up roughly half of GDP for Southeast Asia. You know, right now we're going through a pretty amazing period when both java and ex java are both growing very strongly X java due to a number of things. But you know, the larger the largest one that comes to mind is the sort of commodity cycle that we're seeing. So not only are commodity prices doing well, but I think, you know, the government's move to go more downstream to support, you know, more high tech areas like batteries has really created a lot of value and so, you know, that's that's created a nice virtual cycle within Indonesia itself in terms of GDP growth and consumption growth. Um, you know, that's translated into a strong trade surplus and stable effects as well as, you know, the out performance of the J. C. I. Relative to other industries. I wonder if you could elaborate a little bit on this distinction between java and and X java because um, you know, it's it's really a kind of unique feature of Indonesia is that it is so big and that there is still enormous room for your company to expand just inside Indonesia. Sure. So I mean just sort of demographically then java contributes the majority of G. D. P. Um and that's where the majority of tier one and tier two cities are centered especially towards the center and the west. Um So traditionally most of the growth was driven um within java itself. And then if you think about the outer islands being Sumatra, Sulawesi Kalimantan, um Irian jaya, then that's where a lot of the commodities were typically based. So you know, you've got a large timber and palm based in Sumatra as an example. You know, you've got very large nickel reserves in Sulawesi coal and timber in Kalimantan. So that that really did support GDP growth, but most of the consumption was around, you know those tier one and tier two cities that I mentioned in Java. Now what you're seeing as I mentioned earlier is that you know that the economy is humming across, you know, each of those respective islands. Um and that that's quite unprecedented because you know that means that the entire nation is growing in a very healthy way. You know, I spent some time with with Jack uh drivers in in Jakarta. And one of the things that was fascinating to me is that uh you know the company is learning how to turn these drivers and their families into entrepreneurs and often I found that uh the driver's spouse was the kind of neighborhood uh kind of credit dispatcher and was a way of keeping track of which uh you know, could help people get onto the platform, could help them to borrow money, could help explain the services that offers beyond just transportation. Um I know that you're rolling out, I guess it's called go pay later. I wonder if you could talk a little bit about that and what the opportunity is there. You know, we're, we're always very proud of of the customers that we serve and you know, that entrepreneurial spirit that you're describing um and you know, for the driver partners in particular, being able to help them move from uh an informal economy to the formal digital economy is very important because to your point, you know, they have access to data and schools that they never had before. Um and you know, they truly are again still very entrepreneurial and evangelists for all the things that you know, we can provide, you know, most to them and for the larger customer base, you know, the fact that there there is no kind of legacy infrastructure from established banking system creates in a way, unique opportunities for you that you would not have in other more developed markets. Yeah, I mean, I think we're we're working together with our bank and financial services partners to really leverage digital infrastructure to grow this in a meaningful way because if you look at, if you look at the stacks, I think if I, if I, if I recall this correctly, about 48% of the population is unbanked, there's about 6% credit card penetration and I think for a company with such high potential like Indonesia, you know, there's a lot of work that can be done, but I think, you know, we need to, we need to do it together right as an enabler as partners. So, um, you know, we've discussed that you're still growing very rapidly, uh, you know, in the, in your latest earnings call, I think you, I'm just looking, I think you've lost 280 million in the most recent quarter, which was more than the same period last year. Can you talk a little bit about that and how we get from that to profitability and what's your, what's your timetable for the swing to profit? Sure. So I think a year on year, if you think about seasonality, we rewind, you know, that was right in the middle of the delta variant. And so we just merged. So at that time, you know, we preserved capital both from a post merger perspective to invest in the products that we talked about in terms of synergies, in terms of new product innovation and that, you know, came in in subsequent quarters. And secondly because of, you know, the covid situation and there's quite a bit of organic demand and talents. Um, so we, we again were able to preserve capital I think if you look at it over the past two quarters and quarter on quarter. You know, we've been able to improve both contribution margin and adjusted ebitda margins on a percentage and dollar basis. I mean that's a very and I think it is investor optimism is reflected on what happened with your with your share price. It's been far more resilient than the share price of your your major competitors, which is, which is quite remarkable. Um, I wonder if you could talk a little bit about uh, fundraising and finance prospects just come off this very successful I. P. O. In um in april where you raised more than a billion dollars. Uh, there was discussion after the merger that you might kind of uh follow grabs lead in uh, in a stack listing in in new york. What's the status of those discussions? Are you still still thinking along those lines or is the timing not right. So I think we're fortunate that, you know, not only did we get to start and build our business in a great company, sorry, country like Indonesia. Um, but that doing a local listing on the I. D. X. Means that our customers also happens to be our investors. So when we did our pre I. P. O. Roadshow Then Andrei and I would ask the investors and analysts, you know, who here is a go jek and or took OPD a customer and you know, more than nine times out of 10. You know, everyone would raise either one or both hands, which I thought was pretty cool. Right. Um, so you know, they can understand the value that we create both individually and together. Um, and they're real users of the product innovations that we're rolling out. So I think, you know, that that gives us the benefit of them having that product empathy. Um, and I think that translates into, you know, how, how they look at us as a, as a, as a merged ecosystem. Um, I think in terms of broader fundraising plans, you know, as you mentioned as part of the I. D. X. I. P. O, we did get approval to be able to do international offering. Uh, we have a great CFO Jackie who joined us, you know, just over a year ago. Uh, he he had listed young china and penguins one connect from china onto onto the onto US exchanges. And I think, you know, with his um guidance and leadership were preparing the teams of the infrastructure to be able to prepare for that international offering. But you know, just given where markets are and and sort of the volatility. I think we're waiting for more stable and supportive markets before we consider doing that secondary listing outside of the I. D. X. Um, but I think time will tell and you know, but the preparation works continue to continue to be, um, continue to be a deep part of the homework that we're doing. One of the things that I find extraordinary about go to is your your recent pledge on sustainability. I mean many of the services that you provide um generate a lot of waste, plastic material, you know, packaging uh in addition to uh fuel consumption, but you've committed to zero waste, zero emissions by 2030. Um can you tell us a little bit about that and why you made that commitment and what kind of sacrifice and effort it will require? So we call it the three zeroes commitment or a pledge and as you said, the first is around zero emissions. So the most imminent thing that we did is to be able to ensure that our headquarters are um purely renewable um are driven by renewable energy. I think that that was a great starting point as part of. In addition to that, we've also formed very strategic partnerships to be able to do battery swapping technology especially for our bikes. And we formed a JV to be able to produce electric bikes onshore um and that's very important because we as you know, we have a very large fleet and to be able to electrify that it's great for the environment but it's also great for the customer because it provides a quieter and smoother ride um on the wayside. Then we've done a zero waste side. We've done a lot of work as you rightfully said in terms of packaging in particular for food and e commerce. So as much as we can leveraging, recyclable materials, um being able to do better waste management and reducing the amount of packaging uh, per order generally so that that we're doing a lot of homework there just in closing. I wonder if you had, I mean this is an audience that has many entrepreneurs and and aspiring founders uh in it. Uh if you had any advice for people that are just taking the leave now in their own careers to start new businesses. Um do you see that there are still a lot of opportunity in Southeast Asia for for the startup scene And what's your, what's your feeling about where we are at this particular moment for startups and new centers? Yeah, for sure. I mean I think the opportunity is enormous. So whether it's Indonesia or Vietnam or Singapore or anywhere in the region, you've got a very valuable customer base across consumers, merchants driver partners that are looking for great innovative entrepreneurs to create new products and or infrastructure to be able to basically 10 x, you know, how they work and live and operate. And so with the very deep prevalence of smartphones with the high adoption in each country. Um and with that entrepreneurial spirit, I think there's still a lot of room because if you look at any of our use cases, you know, the digital penetration for on demand or e commerce is in the, you know, low mid teens. So there's a lot of room if you benchmark that to china, if you look at financial services, you know, it's in the low single digits. So if you combine those things, there's just so much opportunity. And I always encourage people, you know, if you've got a dream and you've got that entrepreneurial uh streak, just know that it's going to be a very uh rocky and tough journey. But you know, you've got that purpose, you've got that y and you can hire great teams and leaders that share that common purpose or why? Then, you know, you've got an amazing mission um, and then from there, you know, there's no stopping you. Well Patrick thank you so much for sparing your time and your sharing your insights with us. We look forward to your continued growth along that journey. Thanks so much. Thank you as well.

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