Google and Singapore’s government investment company Temasek have invested in Indonesia’s Tokopedia, the e-commerce company’s founder and CEO William Tanuwijaya announced on Monday.
The investment comes hot on the heels of Microsoft’s capital injection into Bukalapak, Tokopedia’s rival, and reflects the increasing appetite that major US tech companies have for Indonesia’s unicorns, private companies valued at over USD 1 billion.
The announcement confirms an earlier report by Nikkei Asia on the two companies’ investment in Tokopedia.
The US tech firms are increasingly looking at investment opportunities in Asia as growth in the US and Europe slows. They have poured billions into India and are now starting to do the same in Indonesia, the third-largest market in Asia in terms of population.
Google now holds 1.6% of Tokopedia while Temasek-affiliated Anderson Investments has a 3.3% stake, according to documents filed to Indonesia’s Ministry of Law and Human Rights, dated Nov. 4.
Tokopedia shares that Google holds are valued at IDR 16.7 billion (USD 1.1 million) while Anderson-held shares are valued at IDR 33.4 billion. The figures do not necessarily reflect the capital actually paid by both parties, while investment can come in tranches. Google and Temasek could increase their shareholding in the Indonesian unicorn at a later date.
Tokopedia’s Tanuwijaya confirmed investments from both firms on Monday in his personal Instagram account. “We are pleased to welcome Temasek and Google as shareholders in Tokopedia,” he wrote.
“We look forward to working closely with them to continuously build an enduring company, support our mission to democratize commerce through technology, and to further accelerate digital transformation in Indonesia,” he wrote.
The Tokopedia founder did not reveal the size of the investment, but Bloomberg reported last month that Tokopedia was looking to raise around USD 350 million from both parties.
SoftBank Group remains the largest shareholder in Tokopedia with a 33.9% stake in the company held through multiple entities including the Vision Fund. The Japanese company seems to have released some shares in the secondary market, with its holdings lower now than in May. China’s Alibaba Group is the second-largest shareholder with a 28.3% stake.
Google’s investment in Tokopedia is its second cash injection in an Indonesian unicorn, having invested in Gojek, an app that offers many services, back in 2018. The US tech giant’s 6.9% stake made it the second-largest shareholder in Gojek after Gamvest, an entity owned by Singapore state investor GIC, as of mid-July.
Google’s latest deal is the third investment this year by a US tech firm into an Indonesian unicorn. Facebook and PayPal invested in Gojek in June.
The deal also reflects the increasing competition among Indonesian e-commerce companies, and their need to beef up their coffers, as they seek to capture the rise in online shopping due to COVID-19.
But the landscape is changing. While Tokopedia and Bukalapak had long been the market leaders in Indonesia, the region’s biggest digital economy, Shopee, the e-commerce arm of Singapore’s Sea Group, has made aggressive inroads. Shopee has been the most visited online marketplace for four consecutive quarters, according to data from research company iPrice.
The country’s e-commerce market is worth USD 32 billion in 2020, and is set to grow to USD 83 billion in 2025, according to a report by Google, Temasek and Bain & Company.