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Go-Jek receives Mitsubishi Group funding

Indonesian ride-hailing company Go-Jek revealed on Monday that it had secured funding from three companies under Japan’s Mitsubishi group, providing it more ammunition in its fight with Singapore-based Grab for domination in the Southeast Asian marketplace.

Shares of U.S. rivals Uber and Lyft may have flopped after listing recently, but Southeast Asia remains an enticing bet for international companies, as they seek to tap into the growing web-based economy in the region.

Although the value of the agreement remained undisclosed, Mitsubishi Motors, Mitsubishi Corp., and Mitsubishi UFJ Lease & Finance have each taken a stake in the Indonesian startup company. Mitsubishi Corp., along with current partners Google, Tencent Holdings and JD.com, had also invested in Go-Jek in February, bringing Go-Jek’s value to close to $10 billion.

“Bringing Mitsubishi Motors and Mitsubishi Corp.’s long and powerful reach and brand strength in Southeast Asia, as well as the diversified and unique business potential together of Go-Jek, we anticipate the creation of large synergies and innovation that will fuel the growth of the three parties,” said Mitsubishi Motors Chairman Osamu Masuko. “We believe that the accumulation of new mobility services expertise that is expanding rapidly in the region and the potential to join the market would lead to the growth of Southeast Asia.”

The lacklustre IPOs by Uber and Lyft in March and May respectively, based on their tremendous operating losses, posed concerns about investing in these companies but investors seem to think that Go-Jek and Grab can defy the trend. Both have rapidly grown into super apps delivering a variety of services on their platforms, allowing them more revenue streams.

They are also well-positioned to seize the fast-growing Southeast Asian internet market, which is projected to balloon to USD 240 billion in 2025 from around USD 72 billion in 2018, a Google and Temasek study has shown.

Grab is now pursuing its fundraising drive, hoping to raise a total of $6.5 billion this year. It obtained $300 million from Invesco U.S. in the latest round in June. According to CB Insights, Grab is now worth USD 14.3 billion.

Go-Jek’s recent investment also shows that more prominent technology companies are jostling for influence in the region. Grab counts Microsoft as an investor while Google’s weight has been thrown behind Go-Jek. The battle is also between Chinese internet giants. While Tencent and JD.com invest in Go-Jek, Grab has the backing of Didi Chuxing, China’s biggest ride-hailing company.

Grab is also close to Alibaba Group Holdings through its association with SoftBank Group of Japan, so much so that rumours were released earlier this year that Grab was spinning out its financial services business with Alibaba’s Ant Financial and PayPal.

The investment in the Indonesian startup will pit Mitsubishi Motors against Japanese competitors Toyota Motor and Honda Motor, who are both Grab investors. But also backing Go-Jek is Astra International, an Indonesian conglomerate and Toyota’s partner in the biggest economy in Southeast Asia.

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