GoTo emphasised that this move is expected to streamline operations, improve efficiency and lower operational costs. — AFP
JAKARTA: Homegrown tech giant GoTo has inked a memorandum of understanding (MoU) with its key shareholder, Chinese eCommerce powerhouse Alibaba, to integrate its cloud infrastructure into the Alibaba Cloud over the next five years.
The agreement, signed on Sept 13, will require GoTo to migrate its existing cloud services to the Alibaba platform starting next month.
In exchange, Alibaba has committed to maintaining its current 7.37% stake in GoTo, equating to roughly 88.5 billion shares.
GoTo emphasised that this move is expected to streamline operations, improve efficiency and lower operational costs.
“This partnership marks a significant milestone in our journey to create a more inclusive and resilient digital economy in Indonesia,” GoTo Group chief executive officer Patrick Walujo said in a statement on Monday.
“It also underlines our commitment to work with partners in a way that delivers long-term sustainable growth that returns value to our shareholders,” he added.
Since establishing its cloud infrastructure in Indonesia in 2018, Alibaba has built three data centres supporting industries like finance, retail, gaming, transportation, education and logistics.
“We want to empower businesses of all sizes in Indonesia and foster innovation to drive long-term growth,” added Selina Yuan, vice-president of Alibaba Group and president of international business at Alibaba Cloud Intelligence.
The agreement came as GoTo’s shares have taken a significant hit since its initial public offering in April 2022.
They had plunged 80.8% from the listing price of 338 rupiah or about 0.02 US cents to just 65 rupiah by Tuesday’s market close.
During the same period, Alibaba offloaded around 16.2 billion shares, reducing its ownership from 8.84%, which had made it the largest external investor in GoTo, to 7.37%.
The largest shareholder in GoTo is currently Singapore-based SVF GT Subco Pte Ltd, a subsidiary of Japanese tech investor SoftBank.
However, SVF has also reduced its ownership from 8.71% to 7.58% after selling more than 12 billion GoTo shares.
This year, three of GoTo’s co-founders have sold the majority of their shares that are linked to shareholder voting rights but have kept their other shares.
GoTo has made several moves to meet its goal of achieving positive adjusted earnings before interest, taxes, depreciation and amortisation by the end of this year.
Last December, GoTo sold a 75.01% stake in major eCommerce platform Tokopedia for US$1.5bil to ByteDance-owned TikTok.
Following the deal, TikTok merged Tokopedia with its own eCommerce service, TikTok Shop.
According to the disclosure, TikTok would pay GoTo a service fee of about 0.4% on the combined entity’s gross merchandise volume on a quarterly basis.
On Monday, GoTo also closed its operations in Vietnam amid fierce competition in the ride-hailing and food delivery sectors.
The tech giant stated that the decision would allow GoTo to focus on operations that can deliver “a significant market impact” in “a sustainable manner”. — The Jakarta Post/ANN
