How GoTo’s on-demand segment is driving it to profitability

Welcome to the Opening Bell 🔔! Delivered every Monday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and latest trends on Asia’s publicly-listed tech companies. Get it in your email inbox by registering here.

Hi there,

It’s election season in Indonesia, with general elections – which will determine the next president – scheduled for February next year.

You can’t visit the country without seeing large posters for the three presidential candidates along major roads.

Regardless of who wins, you can be sure that the new president will take an interest in how tech companies like GoTo (GOTO, IDX) will continue to help develop the country.

The local tech champion has unveiled a slew of new products recently, with a view to manage costs while growing its market share. These include GoCar Hemat, which offers more affordable car rides, and GoRide Transit, which allows users to combine rides with public transportation.

As my colleague Budi details in this week’s featured story, GoTo’s on-demand services business is nearly in the black, at least on an adjusted earnings basis.

However, the unit still has a way to go, lagging archrival Grab’s (GRAB, NDAQ) equivalent mobility and deliveries businesses in earnings.

One area that can help is reducing reliance on third-party solutions and moving toward more proprietary technology. Grab has also done this: for example, by developing its own mapping technology.

Investors will expect GoTo to go in the black at some point, as well as to generate free cash flow. But it seems to be figuring things out and headed in the right direction.

— Simon

THE BIG STORY

Image credit: Timmy Loen

GoTo’s on-demand segment charts its roadmap to profitability
Among recent initiatives rolled out by its transport business to manage cost is GoCar Hemat, which has reached more than 60 areas in Indonesia.

3 Trends to keep an eye on

Hot stocks, earnings reports, restructuring, pressure from activist investors, and more.

2 Eye-popping facts

The one you didn’t see coming