Superapp GoTo’s Fintech Growth Surges

GoJek advertisements at Dhoby Ghaut MRT station in Singapore; photo taken November 2021GoJek advertisements at Dhoby Ghaut MRT station in Singapore; photo taken November 2021

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Indonesian superapp GoTo’s fintech saw its growth climb in the first quarter.

GoTo reported Monday a jump in demand for its financial technology in the first quarter, as the Indonesian superapp integrated its GoPay offering across its platform’s services.

In 2021, ride-hailing and food delivery superapp Gojek merged with Indonesian e-commerce player Tokopedia to form the super-superapp GoTo, with services spanning e-commerce, payments, courier services, ride-hailing, food delivery and other options. While Tokopedia is mainly Indonesia-focused, GoJek’s ride-hailing and food delivery services have expanded within Southeast Asia.

GoTo Financial said its gross transaction value (GTV) for the first quarter surged 91 percent from the year-earlier quarter to IDR77.5 trillion (US$5.32 billion), while for 2021, GTV was up 80 percent on-year to IDR214.9 trillion. In the first quarter, gross revenue for fintech climbed 47 percent from the year-earlier quarter to IDR358 billion (US$24.56 million), GoTo said in its financial statements.

Integrating Fintech

Across the ecosystem, around 55 percent of the platform’s users used GoPay to pay for products and services in the first quarter, up from 43 percent in the year-earlier quarter, GoTo said. For e-commerce segment Tokopedia, GoPay made up 93 percent of e-money transaction value in the quarter, GoTo said; however, only around 16 percent of Tokopedia’s payments by GTV were e-money transactions, the company said. In addition, GoTo integrated its 21.4 percent-owned Bank Jago into its platform, allowing users to open an account within its app.

“We expect to reap significant additional benefits as we integrate GoJek, Tokopedia and GoTo Financial further and have been investing accordingly in cross-platform integration,” Jacky Lo, GoTo’s chief financial officer, said in the statement.

GoTo has previously touted its ability to increase financial inclusion within Indonesia and the region. The superapp has previously cited data from RedSeer indicating Indonesia’s total addressable market for financial technology services is expected to rise to US$70.1 billion in 2025 from US$17.8 billion in 2020.

Financial Inclusion

Financial services inclusion in Indonesia remains relatively low, despite the Covid-19 pandemic boosting acceptance and use of digital financial services.

According to data in the 2019 Google, Temasek and Bain e-Conomy report, published pre-Covid, Indonesia had 92 million unbanked adults and 47 million who were underbanked, or who had a bank account but no access to credit, investments or insurance. Indonesia’s total population was around 273.5 million in 2020.

The 2020 e-Conomy report showed Indonesia posted a 44 percent on-year increase in the use of selected mobile banking apps for the January-to-September 2020 period.

Wider Loss

Like other Indonesian tech players, GoTo has integrated its payment services with other financial players, such as wealth management app Pluang, boosting the range of financial services it can use to entice customers.

Overall, for the first quarter, GoTo reported a loss of IDR6.61 trillion, widening from a loss of IDR1.96 trillion in the year-ago quarter. Net revenue for the quarter grew to IDR1.50 trillion, up 65.5 percent from the year-earlier quarter, GoTo said.

Shares of GoTo dropped Tuesday as the earnings report disappointed markets. The stock was down 2.55 percent at IDR306 at 11:29 a.m. local time, after touching a low of IDR300 intraday.

GoTo said its transport segment has recovered strongly, with gross transaction value (GTV) for the first quarter reaching around 70 percent of pre-Covid levels; the segment’s GTV grew 73 percent in the first quarter from the year-ago period, GoTo said.

For the second quarter, GoTo guided for gross revenue of IDR5.3 trillion to IDR5.6 trillion, compared with first quarter gross revenue of IDR5 trillion, which was up 53 percent from the year-earlier quarter.