Go-jek in talks to buy payments gateway Midtrans
biggest unicorn Go-jek continues to be on the prowl for strategic acquisitions. The ride-hailing company is understood to be in talks to make a strategic investment in payments gateway start-up Midtrans, according to three people aware of the development.
Responding to a query, an e-mail from Go-jek said, “We cannot give you any comment at the moment. We will get back to you when we have an update.” An email query to Midtrans remained unanswered as of press time.
Industry observers estimated the value of the deal at over $100 million.
Set up in 2012, Midtrans, formerly known as Veritrans, is a payment gateway for credit cards. It aims to provide online businesses in Indonesia with a payment infrastructure that is safe, reliable, and fraud-free. Customers include Matahari Mall, Tokopedia, Bukalapak, Cottonink, Bro.do, Garuda Indonesia, Pegipegi and Jd.id.
According to research reports, the Indonesian mobile payments market is expected to record a compound annual growth rate of 72.3% during 2017-2021 to reach $14 billion in transaction value by 2021, a massive increase from the $1.6 billion reported in early 2017.
In the last one year, Go-jek has made five acquisitions including Indonesian event management and ticketing firm LOKET in August 2017. It acquired Pune, India-based Leftshift, a mobile app developer, to strengthen its technology hold in November 2016.
In October last year, it acquired MVCOMmerce, an Indonesian e-payment start-up. Last year, it acquired Pianta, a Bangalore, India-based mobile platform, and C42 Engi- neering, a boutique software engineering firm.
Last year, it also joined a Series A investment round in Halodoc, a healthcare network platform, in Indonesia. It has now integrated its own on-demand medicine delivery service, Go-med, with Halodoc.
With the Midtrans acquisition, Go-jek would not only augment its payments technology and expertise but also gain access to the former’s existing customer base as it continues to expand the gamut of financial transactions processed by Go-pay, its own digital wallet.
In September, Go-jek president Andre Soelistyo told CNBC that the company was trying to emulate the success of China’s Alipay and Wechat Pay in Indonesia. Interestingly, Wechat-owner Tencent Holdings Ltd is now a Go-jek investor and should have more than a few pointers to offer on how to grow a cashless payments business.
Rival Grab is also amplifying efforts to ramp up its digital payments services. Early this year, it acquired Indonesia’s Kudo, a start-up that allows those without a credit card or bank account to make purchases online. This week, the firm announced that its Grabpay digital wallet can now be used at cash-based merchants, including restaurants and hawker stalls, across Singapore. It also plans to extend Grabpay to the whole of Southeast Asia in 2018.
The latter also formed a joint venture with Indonesian media conglomerate Emtek to develop digital payments. Emtek, which recently revealed that it made a minority investment in Grab, had done a couple of acquisitions in the e-money space. In its quarterly financial report, it revealed that it had acquired a 50% stake in Nusa Inti Artha, the parent company of payment gateway firm Doku, and a 90% stake in Espay Debit Indonesia Koe. Both firms possess the much-coveted e-money licence, which was released by the Bank Indonesia in a regulated manner.
Acquisition spree: Industry observers estimate the value of the deal at over $100 million.