After losing control of Tokopedia, GoTo is now turning its focus to on-demand and fintech business
GoTo will still receive a continuous revenue stream from Tokopedia's e-commerce service fees every quarter
PT GoTo Gojek Tokopedia Tbk (IDX: GOTO) is no longer controlling PT Tokopedia after completing its transaction with TikTok. Business E-commerce TikTok Shop Indonesia and Tokopedia are officially merged under the PT Tokopedia entity.
In a report sent to the IDX, Wednesday (31/1), TikTok Nusantara (SG) Pte. Ltd. has paid for Tokopedia shares amounting to $840 million (around Rp. 13,2 trillion). As a result, TikTok shares are now controlled by Tokopedia with 75,01% ownership, while GoTo's previously 100% ownership has fallen to 24,99%.
With this relinquishment of control, GoTo Group will further focus capital and resources to drive the business on-demand and their digital financial services, incl strategic collaboration with Bank Jago.
Apart from that, PT Tokopedia appointed Vonny Susamto as the new Main Director, replacing Melissa Siska Juminto who served previously. Quoting his LinkedIn page, Vonny is listed as having held a position in Category Management ByteDance, TikTok's parent company, since 2021.
As known, GoTo and TikTok announce strategic partnership to combine businesses e-commerce. In the agreement, TikTok agreed to invest $1,5 billion (around Rp. 23,4 trillion) to fund PT Tokopedia's operations in the long term. GoTo does not need to inject any more funding into Tokopedia with an investment commitment from TikTok.
Impact on business
Even though it no longer controls Tokopedia, GoTo still receives a continuous income stream from service fees E-commerce which is based on GMV each quarter. This revenue will also contribute directly to GoTo Group's EBITDA. GoTo also benefits through digital financial services (GoPay) and on-demand (Gojek) which is integrated in the Tokopedia ecosystem.
GoTo announced that it had realized positive adjusted EBITDA in the fourth quarter of 2023. The official report will not be released until March 2024. All parties involved also agreed that GoTo's 24,99% ownership in Tokopedia will not be further diluted by future funding from TikTok to Tokopedia .
"We can now accelerate progress supported by our ecosystem partners. As profitability and cash flow improve, we will optimize the use of capital in line with new capital allocation plans, which may include initiatives buyback shares, depending on regulations and shareholder approval," said GoTo Group CEO Patrick Walujo in his official statement.
Meanwhile, Tokopedia's financial reports will not be consolidated into GoTo's financial reports as of February 1 2024. It was also stated that the losses associated with the loss of control over Tokopedia reached IDR 80,2 trillion.