Once upon a time, a decacorn like Go-Jek would have been unlikely to extend private rounds of fundraising beyond Series D. However, after Uber's disappointing IPO, Go-Jek aims to show that it's more than a Southeast Asian carbon copy of that cash-burning company. Aware that its core ride-hailing business has limited growth prospects, Go-Jek is pushing full tilt into digital banking across the Asean region. The ride-hailing firm as digital bank is an unproven business model, but deep-pocketed investors seem willing to roll the dice - for now.
In this latest funding round a key part of Go-Jek's strategy is becoming clear: Partner with incumbents rather than merely disrupt them. Siam Commercial Bank is the second major lender to partner with Go-Jek after Singapore's DBS inked a deal with the ride-hailing giant in November 2018. Visa is the first credit-card company to cooperate with Go-Jek.
Visa and Go-Jek's fintech arm Go-Pay are framing their partnership in the context of financial inclusion, a move likely to endear the companies to Asean regulators. “Go-Pay and Visa share a collective vision of enabling convenient and seamless transactions for consumers across socio-economic groups," said Go-Pay Aldi Haryopratomo in a statement.
"Through this partnership, we will explore ways to leverage the power of Go-Jek and Visa’s networks to expand financial access in Southeast Asia," added Visa's APAC regional president Chris Clark.
Meanwhile, SCB's investment in Go-Jek will help Indonesia's premier tech startup strengthen its digital banking services while boosting the online business of the Thai bank, a source told Bloomberg in July.
At the same time, the move looks like a calibrated response to SCB rival Kaiskornbank's $50 million investment in Grab's Thailand business. Kasikornbank and Grab plan to launch a co-branded mobile wallet for the Thai market, GrabPay, before the end of the year.
Fintech competition between Grab and Go-Jek is heating up across nearly every Southeast Asian market. Grab can tap its strong ride-hailing customer base in Singapore, Malaysia, the Philippines, and Vietnam, while Go-Jek is dominant in its home market of Indonesia, which has a larger population than all four of the former countries combined. Thailand is one of the ride-hailing giants' major contested Asean markets.
To that end, on its product and engineering blog, Go-Jek highlights efforts to build a fintech ecosystem for its Thai customers. The partnership between SCB and GET (Go-Jek's local Thai subsidiary) will allow drivers to easily open a bank account and access key financial services including loans and insurance, Go-Jek said in a July post. The two firms "will work together to improve financial literacy among drivers, supporting them with savings plans and knowledge of basic financial products," Go-Jek added.