Indonesia’s GoTo far from profitability one year after listing


GoTo, an Indonesian super app and e-commerce platform, witnessed an increase in net loss by over 50% in 2022, widening its 12-month net loss by 56% to $2.7 billion from 2021. GoTo’s loss is over three times larger than its revenue, which doubled over the past year to Rp11.3tn. Despite its huge revenue, the peers of GoTo such as Singapore’s Grab and Sea and Indonesian e-commerce company Bukalapak are emerging profitable. GoTo’s shares have slumped by less than a third of their ambitious IPO price, making GoTo’s market capitalization the 14th largest on the IDX. Segara Research Institute’s executive director, Piter Abdullah, said, “The company listed just as the market was turning against the sector and demanding profitability, rather than rapid growth.”

GoTo CEO Andre Soelistyo acknowledged the situation and said, “It was a year that changed our thinking and showed us how we needed to operate,” calling the period “challenging” and an “inflection point” for the company. While GoTo claims to be making headway in reducing costs and seeing positive signs of a considerable progress on its accelerated path to profitability, it needs to become more competitive and improve its fundamentals to start making money, say analysts. GoTo attributed the bigger net loss to several factors, including share-based compensation expenses and one-off restructuring costs.

Jianggan Li, chief executive of Momentum Works, a Singapore-based consultancy, says, “The real challenge is they are competing on so many fronts with larger regional competitors who also have better cash positions.” Even after layoffs, GoTo faces challenges as it has to compete with other regional tech companies like Grab and Bukalapak. Bukalapak booked its first profit in 2022 while Sea last month reported its first quarterly profit since going public five years ago. Sea’s restructuring efforts included cutting thousands of jobs and freezing salaries, which helped it narrow its losses significantly. Grab also expects to break even as a group in the final quarter of 2023.

In conclusion, GoTo’s net loss is larger than its revenue, which has been a significant concern for investors. The company has made progress in reducing costs, and its CEO sees positive signs of considerable progress on its accelerated path to profitability. However, the company needs to become more competitive and improve its fundamentals to start making money. Despite laying off some employees, GoTo is competing with larger regional competitors, which also have better cash positions, including Grab and Bukalapak.

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