Can Indonesia’s Go-Jek loosen Grab’s grip on Southeast Asia?

Indonesia’s ride-hailing giant Go-Jek is pulling out all the stops in its battle with rival Grab to dominate the Southeast Asian market.

Fresh from a regional expansion drive that saw the launch of its app in Thailand, Vietnam and Singapore last year, the company last week closed a first round of fundraising in which investors including Google, Tencent, JD.com and Mitsubishi are said to have given it an extra US$1 billion dollars to play with. That’s a tidy sum for a firm already valued at US$10 billion.

The company said the funds would be used to deepen its market penetration in Indonesia and strengthen its presence regionally, following the introduction of its services Go-Jek in Singapore, Go-Viet in Vietnam and Get in Thailand.

In particular, the funds will help it manoeuvre in its two-horse race with Singapore-based Grab in the Southeast Asian market, which could be worth US$31 billion by 2025 (up from US$8 billion last year) according to a joint report by Google and Singapore’s state investment fund Temasek.

Go-Jek is a household name in Indonesia, but not in Southeast Asia, where Grab has the first-mover advantage. Grab, which acquired Uber’s Southeast Asia business last year and was last valued at $11 billion, has more than 8.5 million drivers and merchant partners across the region; Go-Jek has 2.4 million drivers and merchants.

The pair have been battling it out in Indonesia, where both companies first launched their motorcycle-taxi hailing apps in early 2015, a few months after Uber entered the country. The popularity of these services in congested cities drove investment into both companies. Since Grab was founded in 2012, it has raised more than US$7 billion from investors such as SoftBank and Toyota, while Go-Jek has raised more than US$3 billion.