SINGAPORE: Indonesia’s Go-Jek has secured more than US$550mil in a new round of funding from KKR & Co and Warburg Pincus LLC, a person familiar with the matter said, as investors pour capital into the region’s burgeoning ride-hailing industry.
Go-Jek, which provides motorcycle rides on demand, will use the funds to compete with Uber Technologies Inc and Grab, two private car-hailing start-ups now beginning to offer two-wheeled services on its home turf.
Farallon Capital Management and Capital Group Private Markets also participated in the round, the person said on condition of anonymity because the deal is private. Go-Jek declined to comment.
Go-Jek’s funding comes days after Didi Chuxing agreed to acquire Uber’s Chinese operations, shaking up the region’s ride-hailing industry and allowing the US company to focus on other promising markets.
South-East Asia’s ride-hailing market is forecast to grow more than five times to US$13.1bil by 2025, according to a report by Google Inc and Temasek Holdings Pte Ltd.
On-demand car services are taking off around the world as smartphone usage expands and riders seek simpler or quicker transport alternatives.
But the process of signing up drivers and attracting customers is a costly one, requiring big subsidies on rides and therefore plenty of funding.
Didi and SoftBank Group Corp are said to be backing a round of funding for Go-Jek’s local rival, Grab, that could exceed US$600mil and close as early as this week.
Founded by Harvard-grad Nadiem Makarim, Go-Jek started out offering motorcycle rides and has become one of the most popular ways to get around in Indonesia, especially in traffic-snarled cities like Jakarta.
Its name is a play on ojek, the local word for the motorbike taxis that crisscross South-East Asia’s most populous nation.
Earlier backers include NSI Ventures, an arm of private equity firm Northstar Group, Sequoia Capital and Yuri Milner’s DST Global. — Bloomberg