Indonesia’s most prominent tech group GoTo Group is set to receive US$400 million from a wholly-owned subsidiary of Abu Dhabi Investment Authority (ADIA) in its pre-IPO round.

It will be the first principal investment by ADIA subsidiary Private Equities Department (PED) into a technology business in Southeast Asia and its largest investment in the archipelago to date.

ADIA will be the lead investor in this round and joins a global list of prominent GoTo investors, including Alibaba Group, Astra International, Facebook, Global Digital Niaga, Google, KKR, Sequoia India, and PayPal, SoftBank Vision Fund, Telkomsel, Temasek, Tencent and Warburg Pincus.

Also Read: Gojek, Tokopedia confirm merger with the launch of GoTo Group

In August, Reuters reported citing sources that GoTo was set to close an up to US$2 billion pre-IPO funding round in a few weeks. Various reports suggested GoTo plans to list in Indonesia by the end of 2021 before proceeding with a US listing with a potential valuation of $40 billion.

Hamad Shahwan Al Dhaheri, Executive Director of the Private Equities Department at ADIA, said: “This investment in GoTo is aligned with a number of our key investment themes, including the growth of the digital economy in the fast-growing markets of Southeast Asia. We see strong potential in the region, particularly in Indonesia, where the vibrant economic backdrop encourages ADIA to deepen its presence.”

Also Read: 5 lessons from GoTo and Traveloka on building the future of fintech in SEA

GoTo was formed through the merger of Gojek and Tokopedia in May. It is the largest digital ecosystem in Indonesia, whose services span on-demand transport, e-commerce, food and grocery delivery, logistics and fulfilment, and financial services.

The group claims it generated over 1.8 billion transactions in 2020, with a total group gross transaction value of over US$22 billion.

Established in 1976, ADIA is a globally diversified investment institution that prudently invests funds on behalf of the government of Abu Dhabi through a strategy focused on long-term value creation. ADIA has invested in private equity since 1989 and has built a significant internal team of specialists with experience across asset products, geographies and sectors.

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Image Credit: GoTo

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Suppose you see the words “Southeast Asia” in connection with e-commerce. In that case, you probably think of Singapore’s savvy online shoppers or the Filipino e-commerce boom that’s making Manila one of the world’s digital hubs.

And for sure, these markets are exciting, essential and will continue to attract investment for a long time to come. But one country is often left off the list of the region’s digital powerhouses: Indonesia.

And that omission is likely to prove an expensive one for companies who do not capture the opportunities this rapidly expanding market has to offer.

Indonesia’s e-commerce is a growing market

In 2020 alone, Indonesia’s digital economy grew by 11 per cent to a value of US$44 billion. And the digital economy already contributes four per cent to their national GDP. This will come as no surprise to seasoned observers of Indonesia’s digital economy, and particularly its payment sector, which is both thriving and innovative.

In May 2021, ride-hailing and payments giant Gojek and marketplace Tokopedia, Indonesia’s two most prominent startups, merged to form settlements and e-commerce giant GoTo.

With more than 100 million active users, the new group is opening up Indonesian and Southeast Asian e-commerce to new users, demographics and markets.

Also Read: Europe is still in the shadow from an Asian startup point of view: Ubisoft’s Catherine Seys

Indonesia’s preferred ways to pay

It would be a mistake to believe that GoTo, or its payments arm GoPay, are the only kids on the block.  There are almost 150 million Indonesians with internet connections.

This massive online population uses e-wallets and a wide range of bank-transfer apps (contributing to almost 30 per cent of online transactions) and a range of other local payment methods (seven per cent). Indonesians even use cash in around 13 per cent of online purchases.

One of the modern Indonesian payment methods is the local bank transfer app Jenius, with 3.3 million active users, up from 1.6 million just two years ago.

Similarly, Indonesian e-wallet LinkAja recorded a 65 per cent increase in the rate of new-user sign-ups in 2020. During that time, it quadrupled its transaction volumes and grew its revenue by 250 per cent.

Even the Indonesian credit card market has a local twist. Used in just 34 per cent of online transactions, cards are mainly issued by global giants such as Visa and Mastercard.

But the cards used in 13 per cent of transactions are issued by local schemes. This is a substantial chunk of the market which merchants entering the Indonesian e-commerce sector would miss if they only supported the standard payment methods for developed markets.

So, what should merchants, and the service providers who support them, do to prepare themselves for a successful entry into Indonesia’s booming e-commerce and online payments markets? The key is, as ever, localisation.

Also Read: Capturing the next frontier opportunities in the Indonesian e-commerce landscape

Traversing a dynamic e-commerce landscape

The most apparent way merchants and others entering the Indonesian market need to adapt is by optimising mobile.

According to the International Telecoms Union (ITU), just four per cent of Indonesians have a fixed-broadband subscription, while 89 per cent have a mobile-broadband subscription.

And almost 100 per cent of the adult population has a smartphone, while just 19 per cent has a tablet computer.

Language is also an essential aspect of localisation for Indonesians. Over 90 per cent of the population speak and read Indonesian. The most commonly spoken language is Javanese, spoken by almost a third of the country’s inhabitants.

It may be worth noting that the English Proficiency Index, which ranks countries by the proportion of their citizens who speak and read fluent English, puts Indonesia at 74 out of 100.

Probably the most critical requirement, however, is to localise payment methods. Only 29 per cent of all online transactions in Indonesia are paid using globally recognised credit cards. And even this may be an overestimate.

With smartphones now ubiquitous and the uptake of e-wallets, bank-transfer apps and other local payment methods (LPMs) surging, the Indonesian payment market seems set to diversify rapidly.

Also Read: The 27 Indonesian startups that have taken the ecosystem to next level this year

To win in such a fast-evolving environment, merchants and payment service providers (PSPs) must work with a partner that understands local payment culture, preferences and e-commerce conditions.

That’s where PPRO can help. Our local payments infrastructure gives PSPs fast, compliant and seamless access to Southeast Asian local payment methods. All in one place.

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San-Francisco-based global e-signature platform DocuSign announced the launch of DocuSign Ventures which is set to invest in startups that aim to innovate the agreement process, including startups in the Southeast Asia region.

DocuSign Ventures are looking to invest and partner with startups that are working to build solutions in the following areas:

– Agreement process automation and workflows
– AI and smart contract technology
– Identity verification and management
– Digital payment platforms
– Legal and compliance automation technologies
– Vertical solutions in areas such as mortgage and lending

Describing itself as a stage-agnostic investor, DocuSign Ventures said that it targets early stage companies that have achieved early signs of product-market fit or Series A to C stage companies.

It does not typically lead funding rounds and look to co-invest alongside other credible and qualified investors.

Also Read: Legal tech platform INTELLLEX raises US$2.1M funding round led by Quest Ventures

The firm is also “flexible” in its check sizes with no stated maximums or minimums with typical deals that are up to 10 per cent of a round size.

“Agreements are fundamental to everything, traversing how we conduct business and defining the important life commitments we make and depend upon. Despite their essential nature, the agreement process today is still largely manual, static, and rooted in paper,” said Eric Darwin, Head of Corporate Development at DocuSign.

“More and more businesses are recognising the power and urgency of digitising their agreement processes in order to meet the new ‘anywhere expectations’ of their customers, partners, and employees. DocuSign Ventures is excited to partner with the disruptors who are propelling smarter, simpler and frankly better ways of executing and fulfilling agreements,” he continued.

DocuSign Ventures will give its portfolio companies access to its knowledge and experience in the space as well opportunity to develop closer partnerships with the DocuSign Agreement Cloud platform and work with DocuSign’s broader ecosystem of customers, developers and partners.

It has invested in BlackBoiler, DataGrail, Pactum, Snapdocs, and a recent investment in The LegalTech Fund.

e27 has reached out to DocuSign Ventures to find out more details of their plans with Southeast Asian startups.

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Novatti Group, an ASX-listed Australian fintech company, announced today it has acquired Malaysian digital payments firm ATX Fintech Holding.

Novatti will acquire all of the issued share capital of ATX for a minimum consideration of approximately A$8.4 million up to A$9.9 million (US$6.2-7.4 million ).

The agreement is pending due diligence and regulatory approvals. The two companies expect to close the deal by the end of next month.

Novatti, whose solutions include issuing, acquiring, processing, and billing, has been a partner of ATX since 2015.

As per a statement, the acquisition offers an opportunity for Novatti to use its ecosystem and resources to scale the existing ATX business in Malaysia, introduce new services, such as billing, and further expand across Southeast Asia.

Also Read: 5 lessons from GoTo and Traveloka on building the future of fintech in SEA

In addition, there is potential to add other value-added products to ATX’s customer base.

The deal also presents strategic value for Novatti on several fronts, including access to an established network of 30,000+ payments touchpoints across Malaysia, providing an on-the-ground presence in Southeast Asia for further expansion (including leveraging Novatti’s partnerships with other fintech leaders, such as Ripple); and access to ATX’s leadership team and its existing innovative solutions and technology, including its e-wallets.

This announcement follows Novatti’s closing of A$10.5 million (US$7.8 million) Series A round.

Founded in 2011 by Sashie Kumar and Kelly Koh, ATX provides traditional retail stores and kiosks with digital payment services, such as third-party bill and product payments.

ATX owns and operates several B2B and B2C brands — PayHub (B2B payments aggregator), GoPay (B2C digital wallet), MyPOSPay (B2B2C platform for traditional retailers), and RuncitHero (B2B2C online marketplace for grocers).

In FY21, ATX claims to have generated normalised annual revenue of A$3 (US$2.2) million.

Also Read: 21 Southeast Asian startups that help banks gain ground in fintech competition

Novatti MD Peter Cook said: “The acquisition will not only provide Novatti with a strong business in Malaysia but also provides a platform to continue our expansion in Southeast Asia, where we see increasing growth in digital payments. This growing demand has already supported some of Novatti’s other recent activities in the region, including the expansion of our partnership with Ripple into Thailand, after launching in the Philippines earlier this year.”

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Image Credit: ATX

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Doyobi, a Singapore-based provider of STEM teaching resources and teacher professional development to school, has bagged a US$2.8 million pre-Series A funding round led by Monk’s Hill Ventures. 

Tres Monos Capital, Novus Paradigm Capital, and XA Network also joined. 

Carousell CEO Quek Siu Rui, Glints co-founders Oswald Yeo and Seah Ying Cong, and Head of Grab Financial Group Reuben Lai, also co-invested in the round.

Doyobi intends to use the money to build new cohort-based courses focused on upskilling teachers. It will also develop new resources to help teachers effectively deliver STEM and 21st-century skills, including creative and critical thinking, in the classroom.

The capital will also be allocated to expand ‘Instructors As Humans’ — an online community for teachers to seek peer support and professional development chances.

Doyobi also plans to launch the STEM School Leader Fellowship. It aims to assist school leaders, such as principals and department heads, learn how to effectively apply STEM principles in the classroom and develop students’ skillsets and attitudes necessary for more career choices as inventors, entrepreneurs, and changemakers.

Also read: Edutech is surging, but here are the 3 issues it is facing

Founded in 2020, Doyobi is a spin-off from Singapore’s coding school Saturday Kids. 

CEO and co-founder John Tan witnessed a gap between what is taught in schools and what children need to know to be prepared for future employment.

“Curiosity, imagination and empathy are just as important as literacy and numeracy skills. We believe teachers are integral to transforming the classroom experience,” he said.

Therefore, Doyobi enables teachers and school administrators to integrate STEM and 21st century-related classes in a fun and engaging way with guided courses that include videos, quizzes, and projects.

Since its inception, the startup claims to have onboarded nearly 2,000 instructors in over ten countries to use Doyobi’s virtual learning environment.

It counts Leap Surabaya, Codercademy, and private schools, such as HighScope Indonesia, Mutiara Harapan Islamic School, and Stella Gracia School, among its partners. 

While Indonesia and the Philippines are Doyobi’s biggest markets, African educational institutions are also adopting the Doyobi curriculum, said the company.

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