GO-JEK is a leading ride-hailing service in Indonesia that competes directly against Uber and Grab.
The company by Nadiem Makarim has made three acquisitions to advance its mobile payment strategy. The company's that GO-JEK acquired, include: offline payment firm Kartuku, payment gateway Midtrans and payment and lending network Mapan.
GO-JEK started its business in 2015 by offering a ride-hailing service for motorcycle taxis. Two-wheeler transports are popular in Jakarta and its surroundings due to the frequent traffic and congestions. With GO-JEK's popularity, the company expanded to include four-wheeled transportation, on-demand services and also payments.
With the services it provides, GO-JEK claims to have more than 900,000 drivers and more than 15 million weekly active users. The company also works with more than 125,000 merchants with over 100 million transactions per month.
Uber that is the world’s highest-backed private tech company, and Grab, which has recently received $2 billion round, are battling in Indonesia's market where they see promising growth signs.
But GO-JEK here is as a local business in Indonesia, and for that it has an advantage if compared to the two foreign ride-hailing services.
Ride-sharing in Southeast Asia is projected to keep on increasing, making it a multi-billion dollar industry. According to a report co-authored by Google, Indonesia is accounting for upwards of 40 percent. And already, consumer spending on the taxi apps has more than doubled over the last two years to cross $5 billion in 2017.
The goal of GO-JEK's acquisitions, which are are fellow Indonesian businesses, is to ramp up and bolster its payment network, which centers around its Go-Pay mobile payment service.
Founder and CEO Nadiem Makarim said that his company is planning to expand Go-Pay to cover more retails both online and offline. By acquiring the three companies, GO-JEK is seizing the opportunity to offer basic payment services to embrace its major users who prefer to purchase using cash, or don’t have access to traditional banking.
Indonesia as the world’s fourth most populous nation, has a relatively low penetration of credit cards at less than five percent of the country's population, .
"We are now taking Go-Jek to the next stage," said Makarim in a statement. "Through the acquisitions..., we will be working hand in hand with three likeminded companies who share our vision and ethos. This marks a significant development in our position at the heart of Indonesia’s vibrant fintech industry."
Related: Uber Picks Its First President In Indonesia: To Better Compete Against Grab And GO-JEK