The rivalry between Indonesian ride-hailing company Go-Jek and Singapore-based Grab has reached the next level, with the former having received its latest round of funding for its regional expansion from global tech giants.
Go-Jek announced last week that it had received series F funding from Alphabet Inc.'s Google, Chinese e-commerce giant JD.com Inc. and China-based conglomerate Tencent Holdings, with Mitsubishi Corp. and Provident Capital joining as investors.
Go-Jek did not disclose in its press statement the amount it raised, but sources quoted by Reuters said the value was at around US$1 billion (S$1.35 billion).
The funds raised would be used to help Go-Jek penetrate the market in Indonesia and strengthen its position in other countries, including Singapore, Vietnam and Thailand, the company wrote in the statement.
"As we expand internationally, we are excited to extend our vision to more countries and at the same time put Indonesia on the map as a regional hub for tech innovation," said Go-Jek group CEO Nadiem Makarim in the statement.
Go-Jek and its affiliates now operate in five countries in 204 cities and regencies across Southeast Asia, with a network of over 2 million driver partners and 400,000 merchants.
According to Go-Jek, its local brand in Vietnam, Go-Viet, gained an estimated 40 per cent of the country's two-wheeled transportation market share within three months of its launch in August 2018.
The Indonesian unicorn opened its beta app in Singapore last month, while in Thailand, it launched its two-wheeled ride-hailing service by partnering with licensed motorcycle taxis.
At the same time, ride-hailing app Grab has been stepping up its game in Indonesia and neighbouring countries after its acquisition of the Southeast Asia operations of Uber, which decided to pull out from the region.
Grab Indonesia managing director Ridzki Kramadibrata said Indonesia remained the company's biggest market as its services were present in 222 cities, while Southeast Asia would continue to be a region of focus.
Grab claimed it held a 60 per cent market share of two-wheeled transportation and 70 per cent of four-wheeled transportation in Indonesia.
Just like Go-Jek, Grab has continued to receive funding from big investors, including Japan-based conglomerate SoftBank Corp, Chinese tech giant Didi Chuxing and the venture capital arm of Japanese car maker Honda, among others.
Donald Wihardja, deputy chairman of Venture Capital and Startup Indonesia Association (Amvesindo), said Go-Jek had the opportunity to compete with Grab in the regional market after successfully dominating the local one.
"Foreign investors from the tech and real sectors believe that Go-Jek can dominate the Southeast Asian markets," he said, adding that Go-Jek, after the latest funding round, was catching up with Grab in terms of company valuation.
According to sources, Go-Jek's company valuation is now at around $9 billion, while Grab is valued at $11 billion.
Donald projected that the competition between Go-Jek and Grab would be long-term, and that the winner would be the one that would continue to raise funds for expansion.
The founders of Go-Jek said in the statement that they would continue to influence decision-making and direction of the company, while maintaining its long-term vision and pushing for business expansion.
As quoted in the Go-Jek press statement, Caesar Sengupta, general manager of payments and vice president leading the Next Billion Users initiative at Google, expressed his company's confidence over Go-Jek's vision. He said Google was "committed to supporting [Go-Jek's] innovation and contribution to economic growth".