The potential merger of Southeast Asia’s two biggest digital platforms, Grab and GoTo, made headlines last week. Reports from Reuters suggest that the companies resumed talks in December 2024, with investors keen to finalise a deal this year. However, past discussions have fallen through, and there remains uncertainty about whether an agreement will be reached. Current status and the implications of the merger talks Soon after the news about the deal was announced, GoTo’s corporate secretary
retary, R A Koesoemohadiani, clarified in a disclosure to the Indonesia Stock Exchange that no agreement has been reached regarding a merger transaction. Additionally, GoTo stated it does not have any major corporate action plans in the next 12 months beyond share buybacks. This statement casts doubt on the immediacy of the merger, but industry analysts believe discussions could continue behind the scenes.
“If Grab and GoTo join together, the competition in Southeast Asia for ride-hailing and food delivery could change a lot,” Yutaka Tokunaga, CEO of Timedoor, told Inside Retail.
“If they can cut costs and make services more efficient, consumers might see better service quality. For example, if you call a Grab driver and none are available, a Gojek driver (from GoTo) might be sent to you automatically.”
However, according to Tokunaga, while a merger could bring operational benefits, it might also reduce consumer choices and create room for price increases as the combined entity seeks profitability. Both companies have invested heavily in fintech, and a merger could accelerate the growth of digital payments and lending services, benefiting millions of users across Southeast Asia.
Yet, a deal of this scale would attract regulatory attention. Authorities in Indonesia, Singapore, and other key markets will likely scrutinise the merger for potential monopolistic practices.
GoTo went public on the Indonesia Stock Exchange in April 2022 and has also faced prolonged financial struggles. However, aggressive cost-cutting has helped reduce losses. The company exited Vietnam last September, focusing instead on higher-growth areas.
GoTo Group narrowed its losses by 29 per cent to 1.7 trillion rupiah ($108.6 million) for the third quarter ended September 30, 2024, down from 2.4 trillion rupiah ($153 million) a year ago.
Revenue rose 8 per cent to $249.2 million from $230.1 million in the same period last year. GoTo’s group adjusted EBITDA turned positive at US$8.8 million, compared to a loss of US$60.2 million a year earlier.
TikTok acquired GoTo’s Indonesian e-commerce unit, Tokopedia, in December 2023 through a $1.5 billion investment that secured a 75 per cent controlling stake.
What’s next?
While the potential Grab-GoTo merger remains speculative, it holds the power to redefine Southeast Asia’s digital economy. If a deal materialises, it could lead to a dominant regional player with greater efficiency, expanded financial services, and improved profitability. However, regulatory challenges and concerns about reduced competition could pose significant hurdles.
Last month, Estonian ride-hailing and food delivery startup Bolt began hiring management staff and drivers in Ho Chi Minh City as part of its expansion into the Vietnamese market. The company’s app and website now offer Vietnamese as a language option. The Vietnam launch will mark Bolt’s third Southeast Asian market after Thailand and Malaysia.
In Southeast Asia, Bolt launched operations in Thailand in 2020, focusing on Bangkok, Phuket, and Chiang Mai. The company plans to invest $11.5 million this year for expansion.
The company also expanded into Malaysia last year, establishing its presence in the rapidly growing Klang Valley and Kuala Lumpur regions.
According to Statista, Southeast Asia is expected to witness a significant rise in revenue in the ride-hailing market, with projections estimating that it will reach $9.41 billion this year.
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