Brute forcing with capital can undermine growth: Gojek boss

Starting with less funding than its competitors helped Gojek avoid the trap of brute forcing problems with money and forced it to be efficient and build a sustainable business, co-founder Kevin Aluwi said during this year’s Tech in Asia Conference.

Photo credit: Tech in Asia Indonesia

“The danger in a bull market when capital is abundant is not just how much money you’re spending on subsidies to buy growth, it also creates cultural and capability problems,” he noted.

Aluwi added that this was a big issue that a lot of companies founded over the last couple of years are dealing with. He noticed that businesses were throwing money and adding new talent to deal with their problems rather than developing products and solutions that would benefit the company in the long term.

The executive said that his firm’s drive for sustainability was also a big reason behind Gojek’s merger with Tokopedia to form GoTo, which finalized in 2021. He explained that the deal delivers better customer experiences and products that the companies couldn’t have done separately, and it will bring them to profitability without resorting to spending more money.

Asked about bringing GoTo to an IPO, he said the goal was to create “an enduring company that could chart its own destiny, whoever was at the top” and that going public was the natural path for a venture-backed firm.

See also: GoTo Group’s financial health in 4 charts

New engines

Aluwi, who is also a commissioner at Gojek’s electric vehicle venture, said he saw the future of Southeast Asia’s mobility sector in two key areas that Gojek was investing in. These are the electrification of vehicles and multimodal transport – where a single platform provides users with several transportation options.

He noted that ride-hailing and on-demand delivery models are now starting to be profitable, even if margins aren’t large yet. Uber delivered its first profitable quarter in November 2021 after a decade in the red. Competitor Lyft also reported profitability for Q3 of last year.

GoTo Group’s acquisition of local crypto exchange company Kripto Maksima Koin for 124.8 billion rupiah (US$8.4 million) was another path forward for the company, said Aluwi. “Having crypto as part of GoTo Financial’s strategy is essential to their vision,” he added.