Grab: Indonesia’s fifth unicorn?

Last Monday, Indonesian president Joko Widodo – more popularly known as Jokowi – met with Masayoshi Son, the CEO of Japanese conglomerate SoftBank. Also present in the meeting were the chief executives of two SoftBank-backed tech companies: Grab’s Anthony Tan and Tokopedia’s William Tanuwijaya.

The meeting’s key announcement was SoftBank’s US$2 billion investment in Indonesia through Grab, which is opening its second headquarters (after Singapore) in Jakarta. Tokopedia didn’t publicly announce its take on the meeting, and the company declined to offer a statement when Tech in Asia sought its comment.

Meeting attendees, with Indonesian president Joko Widodo in the center / Photo credit: Jokowi’s Twitter account

But an Instagram post published after the meeting by the president became a storm in a teacup. He made an unusual pronouncement: he referred to Grab as Indonesia’s fifth unicorn.

There are two sides to this curious statement. First, while Grab does not release its revenue breakdowns by market, the company is valued at US$14 billion. That means it’s already a “decacorn.” Because the Southeast Asian archipelago is Grab’s largest market, it’s not far-fetched to estimate that its Indonesia business exceeds US$1 billion in value.

The second point, however, is perhaps more nuanced. Grab’s two founders are not Indonesian, while the other four unicorns have local founders.

Willson Cuaca, managing partner and co-founder of East Ventures, thinks the bar must be set higher. (Loket and Kudo, two of the venture capital firm’s portfolio companies, were acquired by Gojek and Grab, respectively. However, it’s an investor in Moka, which is in negotiations to be sold to Gojek.)

(Disclosure: East Ventures is an investor in Tech in Asia. See our ethics statement for more info)

“I don’t think by opening a second headquarters in Jakarta, Grab could be called Indonesia’s fifth unicorn,” Cuaca says. “An Indonesian unicorn must be founded in Indonesia – that’s national pride.”

Cuaca, who also counts SoftBank as a limited partner in his EV Growth fund, points out that Gojek and fellow Indonesian unicorn Traveloka both have offices in Singapore.

“But we don’t call them Singapore unicorns,” he states.

And then there’s Gojek, arguably Indonesia’s most celebrated unicorn. While Jokowi and Gojek maintain close relations – CEO Nadiem Makarim recently had a one-on-one meeting with Jokowi’s outgoing vice president – the fact remains that the president is endorsing a company that’s competing squarely with Gojek.

Gojek declined to comment on this story.

Job creation is key

Being a foreign company in a market could put Grab – or any business – at a disadvantage. The recognition that it’s an Indonesian unicorn mitigates that somewhat, and it’s a sign that its heavy investments into the country are paying off.

Keeping options open