AirAsia Group entered deals to acquire GoJek’s Thailand businesses, including its ride-hailing and fintech operations, for a total of US$50 million, the carrier said in a filing to Bursa Malaysia Wednesday.
“The proposed acquisitions provides AirAsia Superapp with immediate access to an existing e-commerce business with registered food merchants, delivery partners, and on-ground resources to jump start AirAsia Superapp’s e-commerce business and reduce cost and time to enter the Thailand consumer internet market,” the statement said, adding access to the customer base would provide opportunities for cross-selling and up-selling other services.
“Our company believes that there are strong growth opportunities available in Thailand for the e-commerce and payment space,” AirAsia added.
AirAsia said it would fund the deal by issuing shares comprising a 4.76 stake in subsidiary AirAsia SuperApp to subsidiaries of GoJek, adding that would enable the company to avoid interest expense and preserve cash reserves.
While acknowledging the pandemic has hurt Thailand’s economic growth, AirAsia noted the country’s internet economy grew to US$18 billion in 2020, up from US$16 billion in 2019, with a projection to reach US$53 billion by 2025, with a compound annual growth rate of 25 percent.
In mid-June, Tony Fernandes, the carrier’s CEO, told the CNBC Evolve conference AirAsia planned to expand into Southeast Asia’s crowded super app category to find alternative revenue streams as the pandemic had hurt its mainline travel revenue.
“We believe that we have different ways, different channels of creating demand. And we believe we can be profitable quite quickly, Fernandes said at the conference. “We believe that using our data, using our brand, and being very specific, we can build some very nice niches that are cashflow positive and profitable.”
Fernandes added that the airline carried 90 million passengers pre-Covid, and that created a pool of “very rich data” to analyse.
The super app is a largely Asian phenomenon of offering a single app to access a variety of bundled services – such as Grab’s app, which offers ride-hailing, food and package delivery and some financial services. Grab has also received a digital banking license in Singapore.
Go-Jek’s Thai ride-hailing business, called Velox Technology, had posted 2020 revenue of 235.67 million baht in 2020, up from 1,000 baht in 2019, with a 2020 net loss of 565.33 million baht, wider than 2019’s net loss of 2.35 million baht, according to the filing
The fintech business, Velox Fintech, posted 2020 revenue of 902,000 baht, with a net loss of 13.67 million baht.
The deal, which is expected to be completed by the fourth quarter of this year, is subject to approvals from central banks Bank of Thailand and Bank Negara Malaysia.