Is Gojek headed for the exit ramp in Singapore?

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Hello readers,

Cutting your losses is one of the hardest things to do in poker.

I don’t play seriously or for big money, but that doesn’t make it any easier to stand up from the table and admit you’re beaten. We all know that throwing good money after bad is the wrong thing to do, but it can be difficult to remember that in the moment.

Operating a business isn’t exactly like playing poker, but I imagine it’s similarly challenging to admit that it’s time to get out of a market. Gojek has just reduced commission fees in Singapore, and the move might indicate that the Indonesian firm is considering that tough decision.

Today we look at:

• Why Gojek may be looking for the exit ramp in Singapore
• How healthtech funding in Southeast Asia may be up overall, but all is not as it seems
• Other newsy highlights such as Shein’s acquisition of fashion brand Missguided and the deeptech investment plans of Malaysia’s Penjana Kapital

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Going once, going twice, Gojek?

Image credit: Timmy Loen

Last week, Gojek announced that commission fees deducted from drivers’ pay in Singapore will be cut to 15% from 10%.

While drivers cheered the news, analysts have warned that it may herald the Indonesian firm’s exit from the city-state.

• Loss-making: According to DBS Group Research, Gojek still has a “weak” business case in Singapore, and slashing commission fees will only drive up losses not just for the firm but also for its parent GoTo. A report from DBS initially said the rate cut reinforced its view that Gojek would exit Singapore in the medium to long term, though this was later edited out.
• Home sweet home: GoTo is under shareholder pressure to turn profitable, and it may shift its resources and focus further on its home market. Tokopedia, the group’s ecommerce business, may see a significant boost from new laws in Indonesia that prohibit sales activities on social media apps, which has forced TikTok Shop’s departure from the market.
• Banking on the unbanked:Pushing its financial services could be a game changer as GoTo seeks to tap into Indonesia’s unbanked adult population, which number 97 million. Apart from expanding its e-wallet service GoPay across the country, GoTo Financial has also teamed up with Bank Jago to offer bank accounts.

Read more: Will Gojek exit Singapore? Reducing its cut from drivers could be a prelude

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