Having been reported since last year, today Bloomberg published a coverage that confirmed Indonesian ride-hailing giant gojek acquiring minority stake in taxi operator giant Blue Bird.
The e27 content team considered this update big enough that it deserved its own stand-alone coverage, instead of going to our newly minted Morning and Afternoon Roundup. However, when the news came out, we received questions from different parties: Why does this matter so much?
Yes, gojek is a major player in the Southeast Asian startup ecosystem and we are accustomed to keeping a close watch of their every move. But it seems like there is nothing new about this move, because so far, they have:
– Acquired companies
– Secured a partnership with Blue Bird
So why was it a big deal that they eventually bought stakes at the company?
The question is even more prevalent especially when we consider Blue Bird stocks’ performance. While their stocks climbed from IDR2,410 (US$0.17) on Friday, February 14, to IDR2,500 (US$0.18) on Tuesday morning, the numbers have been sliding down since August 2019 and peaked on December 2019 at just around IDR2,890 (US$0.21). Not exactly the kind of performance you would imagine could attract a tech startup of gojek’s level.
Also Read: gojek purchases US$30M stake in Indonesian taxi operator giant Blue Bird
For us, the answer lies in the tech giant’s long-term plan to go public.
In this coverage by The Jakarta Post, gojek co-CEO Andre Sulistyo revealed the company’s goal to do a double listing on Indonesia Stock Exchange and “other major stock exchange overseas.”
While Sulistyo also stressed that this IPO can only happen in the long run, we could see that gojek has begun to take baby steps towards that goal.
A known fan of the cash-burning method, gojek begins to inch away from it to the point where it begins to shut down services that are facing stagnant growth. A report by Ipsos even stated that 54 per cent of Go-Pay users –gojek’s e-wallet service– would continue to use the service even without promotions such as cashback, as explained in this KrAsia report.
gojek is making a move to be more efficient with its war chest. This is only the first step it needs to take to prepare for a public listing.
Having been an asset-light company, gojek certainly sees merit in owning a minority stake in Blue Bird. Their stocks’ performance may have been lacklustre recently, but Blue Bird owns 29,000 fleets –consisting of a variety of vehicles from regular taxis to buses– by 2019 and is operating in major cities in Indonesia.
We must also never forget the power of brand-building and strong public perception. Blue Bird is the top-of-mind for taxi operator in Indonesia, even after it was being disrupted by ride-hailing services such as gojek itself. If you have ever been in the country, you may have had well-meaning friends or colleagues reminding you to “take only Blue Bird” if you ever need to hail a taxi.
Also Read: Morning News Roundup: gojek’s accelerator program introduces 3rd batch of retail startups
From gojek’s side of the house, to be able to own a stake in a major, traditional corporation like Blue Bird is an achievement of its own. It is certainly a promising publicity move.
The remaining question would be, what is next?
Only time would tell. But we have this gut feeling that this may not be the last from gojek.
The post Why does it matter that gojek has acquired stakes at Blue Bird? appeared first on e27.