Indonesia’s Top Tech Startups Gojek and Tokopedia to Merge

GoTo intends to go public this year in what will be a dual listing, said

Patrick Cao,

Tokopedia’s president, at a press briefing Monday. He said the company could do so via an initial public offering, but didn’t rule out a merger with a special-purpose acquisition company, or SPAC, that is already public.

Mr. Cao will be president of the group after the merger is complete, while Gojek’s Co-Chief Executive

Andre Soelistyo

will become GoTo’s CEO.

The group is targeting a market valuation of between $35 billion and $40 billion and listings on exchanges in New York and Jakarta, according to people familiar with the matter. That would represent roughly a doubling in valuations from when Gojek and Tokopedia previously raised money in private funding rounds.

The two companies have collectively raised billions of dollars from investors including Alibaba Group Holding Ltd.,

Alphabet Inc.’s

Google, Facebook Inc., funds managed by

BlackRock Inc.

and KKR & Co., and others.

“We were small, local companies that were going up against global giants,” said

Kevin Aluwi,

Gojek’s co-founder and co-CEO. “And now we’re at an inflection point where we are no longer the underdogs.” He said the combined group will be able to do more to serve merchants, drivers and consumers, and would be better placed to expand outside of Indonesia.

GoTo will compete with the likes of Grab Holdings Inc. and Sea Ltd. in a region with about 670 million people. Tech startups and global investors have been trying to capitalize on the revenue and growth potential from supplying consumers in countries from Indonesia to the Philippines with everything from transportation to online shopping and financial services, all delivered via mobile apps.

Singapore-based rival Grab last month said it would merge with a SPAC sponsored by Altimeter Capital of Menlo Park, Calif., in a deal that values it at nearly $40 billion. That deal was a coming-of-age moment for Southeast Asia’s technology industry, which has long been in the shadow of China’s highflying startup scene.

The latest merger will see Gojek shareholders taking a 58% stake in GoTo and Tokopedia shareholders holding 42%, a person familiar with the matter said.

Gojek, founded in 2010, is best known for its app that connects legions of motorcycle taxis, known as ojek, with transport-seekers in areas such as greater Jakarta, a densely populated area of some 30 million people where traffic snarls and long commutes are the norm. The company has expanded to offer payment services and on-demand services including parcel and food delivery and housecleaning.

Tokopedia, which was founded in 2009, runs an online consumer-to-consumer marketplace. Its name combines the Indonesian word for store—toko—with encyclopedia.

The companies, which have focused largely on business in Indonesia, the world’s fourth most populous country, also plan to develop their operations in Singapore, Thailand and Vietnam. The combined group handled over $22 billion worth of transactions in 2020, operated a fleet of more than two million drivers and partnered with more than 11 million merchants as of year-end, the companies said.

If GoTo succeeds in going public, it will add to the relatively few listed vehicles for investors to tap into consumer-driven growth in Southeast Asia. Some investors have likened the region to China 15 years ago, when the country’s first batch of startups began making waves with public listings in the U.S.

Shares of Singapore-based Sea, a videogaming and e-commerce group backed by

Tencent Holdings Ltd.

, have more than tripled in the past year, giving the New York-listed company a market capitalization of more than $110 billion. Grab’s SPAC merger, meanwhile, is expected to close in July.

Write to Ben Otto at ben.otto@wsj.com