GoTo IPO marks win for 2 early SEA VCs, and may supercharge the region’s VC scene

“It’s mostly luck,” quips Willson Cuaca, founding partner of East Ventures, when asked about the growth of his firm’s investment in Tokopedia.

Whether it comes down to fortune or not, there is no doubt that Jakarta-based East Ventures, which is also an investor in Tech in Asia, is poised to land a significant fortune from its early bet in Tokopedia.

GoTo Group CEO Andre Soelistyo / Photo credit: GoTo Group

A 300x return

Tokopedia, which has merged with ride-hailing giant Gojek to form the country’s largest tech company (currently worth around US$22 billion), sold a minority stake of its business to East Ventures back in 2010 in exchange for early capital.

At the time of GoTo’s IPO, those shares were worth over 300x the initial investment, according to an industry source familiar with the matter. The 28% decline in GoTo’s share price since its IPO means that this number is now lower, but it remains an astounding return nonetheless.

East Ventures is one of four firms that invested in Tokopedia between its seed and series B rounds. However, only two of them stuck around until GoTo went public earlier this month.

Photo credit: Tokopedia

Japanese firm Beenos is the only other early investor in Tokopedia besides East Ventures that still holds a stake in GoTo, according to the Indonesian company’s pre-IPO filing with the local authorities.

Tokopedia’s first investor, Indonusa Dwitama, is not on GoTo’s list of current shareholders, while CyberAgent Ventures (another early investor) confirms to Tech in Asia that it had fully exited Tokopedia in 2017.

While East Ventures has yet to liquidate its investment due to the lockup rule that came with GoTo’s IPO, which prevents shareholders from divesting for a period of eight months, it is poised to enjoy its largest exit once it cashes in on its investment. Apart from luck, the success is owed to East Ventures’ “conviction-based” investment thesis, which sees the firm stick by its portfolio founders through thick and thin, Cuaca says.

Initial skepticism overcome

At Gojek, Singapore-based VC firm Openspace Ventures shares a similar story.
The firm invested in Gojek when it barely had an app and was the company’s first institutional investor.

At the time of GoTo’s IPO, Openspace’s shares in the company were worth close to US$200 million, according to Tech in Asia calculations based on filings with the Indonesian financial authorities. This is twice the size of the US$90 million fund from which the VC firm made its Gojek investment, illustrating how VC investors tend to earn outsized returns from a small number of bets.

It’s a handsome reward for Openspace’s bold decision to raise VC money targeting Southeast Asia at a time when doing such a thing was almost unheard of.

First of many or outlier?