Local IPO bears fruit for merged entity of Indonesian pioneers Gojek and Tokopedia
GoTo, the combined entity resulting from the merger of Gojek (an Indonesian ride-hailing player) and Tokopedia (an Indonesian e-commerce company), has raised approximately $1.1 billion (IDR 15.8 trillion, per company) upon its public market debut on the Indonesian Stock Market Exchange (IDX) earlier this month. GoTo last raised a round of $1.3 billion in what was then described as pre-IPO funding in late 2021.
GoTo’s IPO can be considered a success, with shares priced at 338 Rupiah each and trading up to 442 Rupiah, according to data from Yahoo Finance. GoTo has returned some profit since the opening of the trades, but is still worth more per share than where it was priced. The company recently closed at 358 Rupiah, just over 5% in its most recent trading session.
The Exchange explores startups, markets and money.
Read it every morning on Marketingwithanoy+ or get The Exchange’s newsletter every Saturday.
The IPO market today is doomed around the world, especially in the United States, where many technology companies have historically been publicly traded. GoTo initially showed interest in dual-listing, but eventually decided to list only on the Indonesian stock exchange.
Given the generally icy global IPO climate and the fact that GoTo managed to float without sinking, The Exchange got curious. Let’s take a look this morning at the company’s financial performance and the resulting multiples.
From there, we’ll consider the preferred market as we work to better understand how it seems that no high-growth tech company in the United States can go public, but a giant listing in the less crowded Indonesian market was feasible.
At the time of the merger of Gojek and Tokopedia, the company reported a combined gross transaction volume (GTV) of $22 billion in 2020. In other words, it was already a major concern.
More recently, the company said it generated a total of $28.8 billion in BTV in the 12 months ending September 30, 2021. That’s growth, if not fast growth from a platform spend perspective.
Leaning on Deal Street Asia’s summary of GoTo’s expected results, taken from a “created for investors” document, the company expected to scale from 3.328 trillion Rupiah ($231.7 million) in 2020 net sales to 6.258 trillion Rupiah ($ 435.8 million) in 2021. Looking ahead, estimates for the company push its net sales figure to 10,696 trillion Rupiah ($744.8 million) in 2022.
Today, GoTo is valued at 424 trillion rupiahs, according to data from Yahoo Finance. That equates to a market cap of $29.53 billion. From a very loose multiples perspective, the company is valued at a forward (2022) net income multiple of just under 40x, a number that is far from cheap.
Are investors crazy to pay that much for GoTo stock?