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SINGAPORE/JAKARTA — GoTo is banking on a steady market debut after raising $1.1 billion in a relatively cautious IPO, while a booming local stock market bolsters expectations that the biggest Indonesian tech company can reverse a global downward trend in tech stocks.

Formed by the May merger of payments ride-sharing company Gojek and e-commerce giant Tokopedia, PT GoTo Gojek Tokopedia Tbk will debut in Jakarta on Monday following one of the largest initial public offerings (IPOs) ever. in the world so far this year.

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Taking advantage of new listing rules, the debut will mark a turning point for the $70 billion digital market in Southeast Asia’s largest economy, where record venture capital funding is creating a wave of startups.

“GoTo is Southeast Asia’s most differentiated technology company. Compared to its peers, diversification is going to be a very important thing for investors to master and understand how to properly value the business,” said Shane Chesson, partner at Openspace Ventures, one of Gojek’s early investors.

Indonesia’s digital economy is expected to grow nearly five times to reach $330 billion by 2030 from 2021, a study by consultancy Bain & Co and GoTo backers Alphabet Inc and Temasek Holdings Pte Ltd has shown.

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While US peers Grab Holdings Ltd and Sea Ltd operate across Southeast Asia, GoTo focuses on Indonesia. With 2.5 million drivers, 14 million merchants and 55 million users transacting annually, GoTo’s businesses overlap millions of small and medium businesses across the archipelago.

Angus Mackintosh, founder of CrossASEAN Research, said in a report on Smartkarma that the key to GoTo’s IPO was that it was small and offered only to local investors. “That should mean there’s stronger support.”

GoTo is selling 4% of shares, with most being taken over by funds. Backed by names such as SoftBank Group Corp’s Vision Fund 1, Alibaba Group Holding Ltd and Abu Dhabi Investment Authority, GoTo is also expanding its investor base by awarding shares to 600,000 drivers.

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It will also be the first to issue multiple-voting shares and implement new rules allowing unprofitable companies to list directly on the stock exchange’s main board.

Analysts said the size and valuation are below expectations and GoTo was likely aiming to avoid a repeat of the experience of its e-commerce peer PT Bukalapak.com Tbk.

Bukalapak raised $1.5 billion in July by selling 25% of the shares after initially targeting $300 million. Its stock debuted strong but fell 25% within days and halved from its IPO price.

GoTo has priced its shares at 338 rupees ($0.0235), the high end of its indicative range.

Its investors are subject to an eight-month lock-up, or two years for those who hold voting shares of more than one class. With Bukalapak, although there was an eight-month freeze, some funds could sell up to 10% of holdings immediately.

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GoTo will become Indonesia’s fourth most valuable company at $28 billion, with analysts estimating an index weighting of up to 9%.

“Once you’re in the index, all local funds pretty much automatically buy,” said one GoTo investor. The IDX is at an all-time high and is the best performer in Asia this year at 9%.

GoTo Chairman Patrick Cao said weak markets prompted caution on pricing. Still, the company expects the listing to support fundraising and plans to list overseas within two years.

“It’s a very challenging environment in the public market now, with market caps of DiDi Global Inc, Grab, DeliveryHero and many others falling below GoTo’s target valuation,” Jianggan Li told Advisory Momentum. Works. ($1 = 14,357.0000 rupees) (Reporting by Fanny Potkin, Anshuman Daga and Stefanno Sulaiman; Editing by Christopher Cushing)

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