- A GrabGoTo merger would create near-monopoly power in Indonesias ride-hailing and food delivery (about 91% and up to 99% share), with major efficiency upside but high competition risk.
- Profitability pressures and investor demandsdespite GoTos first 2024 EBITDA profitare pushing both firms toward consolidation to cut costs and deepen fintech, commerce, and logistics synergies.
- Indonesia and Singapore regulators are likely to impose intense antitrust review, with potential remedies tied to dominance thresholds, foreign-ownership politics, and protections for drivers and small merchants.
- The deal could produce a regional digital champion, but may also reduce innovation and raise prices unless strong safeguards preserve contestability and bargaining power.
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A potential merger between Grab (Singapore-based, listed in the U.S.) and GoTo (Indonesia’s super-app combining Gojek and Tokopedia) represents one of the most consequential consolidation possibilities in Southeast Asia’s tech and platform economy. Several structural facts are well‐established, strategic drivers are compelling, but so are the risks—and the regulatory, commercial and political trade-offs are large.
Market structure and financial condition
GoTo reported its first annual profit in 2024: adjusted EBITDA of approximately Rp386 billion (~US$23.5 million), a 30% increase in revenue year-on-year and 58% growth in gross transaction value. Its finance arm broke even ahead of schedule, with expectations for EBITDA in 2025 of Rp1.4-1.6 trillion, including Rp300 billion from financial services alone. Grab, meanwhile, has seen its valuation decline sharply since its IPO in 2021, under pressure from intense competition, though specific numbers for 2024 are less clear in public sources.
Combined market power and dominance
Data from Euromonitor and local sources estimates that in Indonesia, a combined Grab-GoTo would control over 91% of the ride-hailing market, and around 99% in certain verticals like food delivery, when merging overlapping services. Across Southeast Asia more broadly, the merged entity could represent ~85% of ride-hailing GMV. These levels far exceed typical dominance thresholds in competition law, triggering regulatory concern and potential requirements for remedies.
Strategic rationale: synergies vs. sustainability
The appeal of the merger lies in synergies: lower infrastructure and overlapping engineering costs, aggregated customer acquisition, unified logistical assets, cross-selling financial products, and stronger negotiation power with merchants and delivery partners. For GoTo, profitability has been elusive; achieving first EBITDA profit in 2024 improves its negotiating position. Regulatory compliance, national ownership stipulations (Danantara’s potential minority stake), and foreign capital oversight complicate structural terms.
Regulatory risks and public policy trade-offs
Indonesian law (Law No. 5 of 1999) and authorities (Competition Commission KPPU) have outlined that dominance above ~50% is legally significant; a merged entity exceeding 90% in key markets would trigger “super-dominant” classification. Singapore has precedent from Grab’s 2018 acquisition of Uber’s regional business, where CCCS imposed measures including removing exclusivity with drivers and ensuring contestability. Key risk areas: higher prices, reduced platform innovation, weaker bargaining power for gig workers, risk of exclusionary practices, and barriers to entry for future challengers.
Open questions and scenarios
– Will the government demand or facilitate a majority Indonesian ownership of the merged entity, affecting foreign investors’ stakes?
– What remedies would be required? Possible divestitures in certain regions or verticals, pricing caps or transparency, protections for gig workers (minimum earnings or algorithmic fairness).
– Could smaller competitors or foreign entrants be supported to prevent lock-in? Regulatory tools include data portability, supporting new platforms.
– What is the balance between scale needed to invest in AI, payments and logistics infrastructure, and competition needed to drive innovation and consumer welfare?
Strategic implications
For investors: potential upside if merger clears approvals and materializes expected cost savings; but risks include regulatory imposition, political resistance, possible forced structural remedies reducing realized synergies.
For competitors: must adapt to a potentially near-monopoly rival; may seek niche specialization or regulatory protection.
For policy makers: tough balancing act—how to enable national champions and regional scale while guarding consumer, labor, and small business interests.
Supporting Notes
- GoTo recorded its first annual profit in 2024, with adjusted EBITDA of Rp386 billion (~US$23.5 million), revenue growth of 30%, and gross transaction value up 58% year-on-year.
- Analysts forecast GoTo’s adjusted EBITDA for 2025 between Rp1.4-1.6 trillion, with Rp300 billion expected from its financial services segment alone.
- A merged Grab-GoTo entity is projected to control over 91% of the ride-hailing market in Indonesia.
- In Southeast Asia broadly, the combined entity would hold approximately 85% of ride-hailing GMV share, and possibly around 90% in Singapore and Indonesia specifically.
- Regulatory dominance thresholds—Indonesia’s legal framework considers 50% market share alone to be significant for dominance; the merged entity would exceed this by a large margin.
- Grab’s valuation has dropped since its IPO, GoTo’s share price similarly under pressure; the combined entity’s value is estimated in proposals around US$15-23 billion, significantly below past peaks.
- Political dimensions: Indonesia is demanding local ownership (Danantara sovereign fund may take a minority stake), oversight of foreign investor influence, and protection of national champions.