POST NAUTICAL

What you need to know:

In December of 2020 Bank Jago announced that it would be receiving a major investment from the Gojek investment arm.  Jago was founded in 1992 in Bandung under the name PT Bank Artos.  Up until 2019, the bank offered traditional products before going through a restructuring in June 2020. The new focus of the bank is a technology first with the tagline “A Bank for everyone to grow together. With the Gojek IPO and Tokopedia merger on the horizon in December of 2020 Gojek announced a $159m investment in Bank Jago. The result was a 22% stake in the bank by Gojek.  

Why it matters:

Today the purpose of this investment became more evident, Gojek intends to embed the bank directly into the Gojek app.  This will allow the roughly 170m Gojek users to be able to sign up for Bank Jago services directly from the app.  This investment and integration should continue to see a rise in the overall valuation for Bank Jago as the fourth largest bank in the country.  For Gojek this means a growing list of fintech services at a critical moment in the countries financial development.  Internet penetration in Indonesia as of 2021 sits at roughly 77%. Contrast that with the percentage of people in Indonesia with a bank account at 52%.

To put it simply Gojek has positioned itself to be a major player in nearly every facet of the Indonesian economy.  If the Gojek and Tokopedia merger go ahead this year, and with the Bank Jago embedding the company will be well-positioned for an incredible IPO.

Its no secret, I’m a fan of GoJek in Indonesia. I’ve been impatiently waiting for the company to be publicly traded. In 2018 I left my job for an indefinite hiatus and I’m still on it. On my journey, I came across GoJek and it became a lifesaver of sorts. Whisking down dusty backroads on the back of a scooter in a country whose language I couldn’t speak was magical. Getting western food delivered to my hotel, heaven. That just the tip of the iceberg of services offered on GoJek. Even going through the drama of trying to change my phone number with GoJek didn’t detour me from my fascination with the company.

GoJek is unique the ride haling and SuperApp space in Indonesia. Unlike its main competitor Grab, GoJek does not accept foreign credit cards. At first glance, this is rather annoying and especially for a foreign national. But when you dig deeper you find that Indonesia First is a philosophy that runs deep in the country. Why is this important? GoJek is pricing its fairs and services at local prices. While Grab is more convenient, those fairs and services are going to cost more.

Investing in SE Asia and a GoJek IPO

From an investment standpoint in GoJek, why does this matter? Locals are paying local pricing and that money is recirculating in the Indonesian economy. Unlike Grab which is a Singapore bases company and when you buy a service through them, those dollars are going out the window to the island nation.

Being the worlds largest archipelago, Indonesia is a land of many, many cultures and ethnicities. Even the idea of keeping the money local in Indonesia isn’t good enough for some locals, banning these services from their neighbourhoods. This concept of Indonesia first, travels down to individual neighbourhoods. The idea of sending money from your neighbourhood in Bali to Java where GoJek is based is a no, no. The same can be said for Kalimantan where for much of the island there is no ride-hailing super apps.

Going further you find this trend of Indonesia first is at the core of its principles. Try to invest in property in Indonesia, that will be a challenge and broadly speaking is not a reality for foreigners. Thinking of starting a business in Indonesia, be prepared to hand over a percentage of ownership (there are varying degrees which this is the case.).

Tokopedia and Gojek merger

Tokopedia, which GoJek is rumoured to be in merger conversations has the same only allows Indonesians to tell on their app. Can I sell on Tokopedia as a foreigner? Not a chance any time soon. Keep the money local.

So what changes if Tokopedia and Gojek merge. Think amazon.com on steroids merging with Uber. That’s an understatement, imagine if Uber and Fedex were one company. Then imagine amazon.com was also merged with Square. Every local business would then have the ability to sell to customers across Indonesia and have that delivered through an extensive delivery network primarily built on a network of independently owned scooters. The velocity at which money will be moving throughout Indonesia is about to rapidly increase.

Plus, GoJek is already expanding to Thailand and Vietnam and that is money coming into Indonesia.

So why care, why would you want to invest in Indonesia. I’ll keep it simple, Indonesia is the worlds fourth-largest population, behind the United States did you know that? They have the largest economy in SE Asia. 24% of the population is under 14, and nearly 82% under 54.

GoJek IPO 2021…2022 who knows!

So imagine when a Gojek/Tokopedia IPO comes out and we can buy that stock on the US market. I wish I had a crystal ball to know when the GoJek IPO date and what the GoJek price will be.

Suddenly those companies owners and investors are going to become incredibly rich. Indonesia will have its technology unicorn. Investing in Indonesia is nearly impossible for the average person but with the US trades IPO, I’m incredibly excited.

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