Go-Jek and Grab are turning Southeast Asia’s startup ecosystem tribal

By now, you’ve read about SoftBank cocking a snook at its critics with its Vision Fund 2 announcement last week, scratched your head and moved on. Anything is possible in the world of tech investing today as long as it doesn’t violate the laws of physics, right?

An equally important show of strength is taking place in Southeast Asia. Grab and Go-Jek, ride-hailing companies that are morphing into super apps, are locked in a battle. A battle that is already Alibaba-Tencent like, say many investors.

Go-Jek is closing in on a $10 billion valuation. Grab, meanwhile, is valued at $14 billion. Grab’s ongoing Series H round is expected to close with a total of $6.5 billion raised. Go-Jek, on the other hand, is raising a Series F that, initially aimed at $2 billion, has reportedly been enlarged to $3 billion. 

The two platforms are gunning to become the de-facto gatekeepers to SE Asia’s digital economy as they begin to expand to services beyond ride-hailing. Companies entering the region, like, say, India’s OYO and BookMyShow, or those starting up locally, are flocking to Grab or Go-Jek to bet that on approach. It is early days, but the reach is potentially huge and instantaneous, as is the scope for funding and potential exits on these platforms.

This is a big deal in Southeast Asia, where few companies from outside the region have bought up local businesses. Go-Jek and Grab represent a new type of acquisition, with a local buyer and a local seller.

Jon Russell, our newest colleague in Bangkok, spoke to over a dozen VCs to understand how the battle lines, even on the cap tables, are being drawn. His story starts at a covert meeting in Jakarta in 2016 where top Go-Jek, Grab and Uber executives met to divide Indonesia’s mobility pie amongst themselves. The 2019 reality, not only furthest from that deal, is that it’s no more an Asian play, with Microsoft and Google each investing more than $100 million in Grab and Go-Jek, respectively.