According to the CB Insights ‘Global Unicorn Club’ report, Indonesian ride-hailing company Go-Jek has become the country’s first decacorn, after it was valued at $10 billion USD in April 2019. The report lists Go-Jek in the 19th position, below its competitor Grab, which is valued at $11 billion USD. The two ride-hailing apps are battling it out to become Southeast Asia’s leading ‘Super App’ for the masses.
While Go-Jek’s detacorn status is based only on the CB Insights report and hasn’t been confirmed, this is a major milestone for the Indonesian tech company. Go-Jek’s most recent Series F round of funding raised $100 million USD from investor PT Astra International, which is an Indonesian trading company involved in the agriculture, mining and transportation industries.
A ‘decacorn’ is a step up from a ‘unicorn.’ It refers to a tech startup that is valued at not just $1 billion USD, but $10 billion USD and over. Currently, two tech startups from Southeast Asia have made the decacorn list, attesting to the tremendous growth and business potential in the region.
Rise of mythical creatures
Evidently, Indonesia is not short of homegrown unicorns (a private company valued at over $1 billion). Alongside Go-Jek’s newly minted decacorn status, startups like Tokopedia, Traveloka and Bukalapak have also reached unicorn status. Ignatius Untung, the chairman of the Indonesian E-Commerce Association (idEA), said that Tokopedia, the leading Indonesian e-commerce platform, was set to follow in Go-Jek’s footsteps to becoming a decacorn. Tokopedia is currently valued at around $7 billion USD and has the potential to become a decacorn by 2019 or 2020. Ignatius also predicted that Indonesia would give rise to several more unicorns in 2019, due to the rapid growth of the startups.
While becoming a billion-dollar company was almost something of a myth a few years ago, they are now far much more common, and there are 341 companies belonging to the unicorn club. According to Rocket Space, to be exceptionally successful as a tech startup you must:
- Create something disruptive
- Prioritise your company’s mission, values and culture
- Believe your product or service will radically improve the lives of users
- Have a revenue-based business model that makes a profit from day one
An outstanding tech company understands how to create a product that achieves the right product-market fit, disrupt current market offerings, and serve a large global market. The startup should also focus on scaling the company via its ‘power users’ or a loyal base of users who advocate for the brand. They should also leverage the power of networking within the tech ecosystem and social networks like YouTube, Facebook, and Instagram to scale the company to new heights.
Can Go-Jek go the distance?
Go-Jek’s rise to decacorn status has been a long time coming. Go-Jek began in 2011, as a ride-hailing app in its native country of Indonesia – and has since spread its wings by launching in Thailand, Singapore and Vietnam. With a fresh round of funds from investors including the likes of Google, Tencent, J.D.com and Mitsubishi, the startup is looking to further deepen its expansion into those countries.
While Go-Jek is a well-known name in Indonesia, it currently lags behind Grab in the rest of the Southeast Asian region. Grab acquired Uber’s share of its Southeast Asian business in 2018, and boasts 8.5 million drivers – whereas Go-Jek only has 2.4 million drivers.
This doesn’t mean that all is lost. Go-Jek is rapidly expanding in Vietnam (where it has quickly gained a 40% share of the market), and is also launching its GoPay e-payment system in Thailand and the Philippines. Although Go-Jek is primarily focussing on ride-hailing, small parcel and food delivery services in Southeast Asia, e-payments are likely the next in-demand service for a largely unbanked population in these countries.
During its expansion, Go-Jek has had to rely on regional partners for wider access to these markets. It has partnered with Singapore-based bank DBS, for online payment services through the use of DBS’s mobile wallet DBS PayLah!. The company even bought Coins.ph, a Philippines-based FinTech company that offers e-wallet and remittance services.
In its push to become the top ‘Super App’ in the territory, Go-Jek has run into some roadblocks in its neighbouring countries. For instance, in the Philippines, the Land Transport Franchising and Regulatory Board denied Go-Jek’s application to operate in the country, leading to its business being handled by Singapore-based Velox Southeast Asia Holding. Go-Jek has filed for reconsideration, but currently, things are still up in the air.
Meanwhile, back in Indonesia, Go-Jek had to implement security features (including an emergency button) for its Go-Car service. This is due to an incident where a customer (a Go-Massage therapist in Bandung) was allegedly raped. In response to this incident, Go-Jek partnered with Hollaback! Jakarta to conduct driver training regarding sexual harassment issues, and to raise customer awareness about the potential dangers present when using the app.
Despite this setback, Go-Jek’s expansion plans – which are rife with consideration of other Southeast Asian markets – are still in place. The company founders declined to comment on which markets the company will actually pursue, and this has led to speculation about how far and wide the company’s presence will extend.
While investors definitely seem to be backing the company, Go-Jek’s journey as a decacorn in the region is just beginning. There are still many twists and turns to navigate on the road ahead, as each Southeast Asian market is so diverse. Only time will tell if there is space in the market for both Grab and Go-Jek, and whether they both will be profitable in the end.