Analysis: Facebook, PayPal will help Gojek win Indonesia, but not Southeast Asia

Earlier this week, Gojek announced that it received investment from US-based tech giants Facebook and PayPal. Both firms join existing backers Google and Tencent who also participated in this funding round.

The deal not only gives Gojek the cash it needs to ride out the pandemic, which has affected its ride-hailing and food delivery volumes, but it will also help the Indonesian unicorn in its bid to conquer digital payments in its home country.

Photo credit: Gojek

Looking outside of Indonesia, things are more complicated. The new investment is unlikely to help Gojek make a dent on Grab’s dominance in other Southeast Asian countries. In fact, it’s unclear how much importance Gojek is putting on its regional expansion, as Indonesia remains a must-win market for any consumer tech firm in the region due to its size.

That being said, Facebook’s backing could set the table for more capital injections that may bring the company closer to amassing a war chest that can rival Grab’s.

At the moment, Grab leads Gojek by a wide margin in terms of active users in Southeast Asia, according to third-party estimates seen by Tech in Asia. But while Gojek has a lead over Grab in the same metric in Indonesia, the gap is smaller.

Win-win in Indonesia

The latest investment brings Gojek’s series F fundraise over the US$3 billion mark, according to the company. This implies that it has raised an additional US$800 million since its last announcement in March.

Facebook’s investment in Gojek marks the social media giant’s first capital injection in an Indonesian firm. Gojek’s payment arm GoPay, which is ubiquitous in the country, may have been a key consideration in Facebook’s decision.

Currently, the payment service is only active in Indonesia – it operates in other countries via a partnership model – and is competing against Grab’s digital payment partner Ovo. GrabPay, meanwhile, is available in five countries.

For the social network, the recent deal could mark a breakthrough in its attempt to penetrate Indonesia’s payments market.

Southeast Asia a big question mark