The fight between and over the ride-hailing behemoths of the marketplace is pushing into a price war after Gojek was able to fund raise over US$1 billion.
Recently, Gojek announced it has finalised the first close of its ongoing Series F round, led by existing investors Google, JD.com and Tencent. Other investors include Mitsubishi Corp and Provident Capital.
Over US$1 billion was raised, according to industry sources. This values Gojek at between US$8 billion and US$10 billion.
Gojek will use the funds to double down on key verticals in Indonesia and strengthen its regional footprint. The company operates in the transport, food delivery and payments segments in its home market, Indonesia. It recently expanded its transport service to Singapore, Thailand and Vietnam.
Gojek will also further its strategic partnership with JD.com in Indonesia, via e-commerce joint venture, JD.id, and last- mile delivery logistics venture, J-Express.
With players boasting bigger war chests, the ride-hailing industry is now evolving from "primarily single journey price competition model to a more multi-layered competitive environment", Oliver Redrup, director specialising in transport at PwC Singapore, told The Business Times.
"The ride-hailing companies realise that competing on price alone is not a long-term sustainable model and they are focusing on offering a broad spectrum of quality services to build customer loyalty and control more of the daily spend," he said.
Hian Goh, co-founder and general partner of Openspace Ventures - an early backer of Gojek - agrees. He said Gojek moved past cheap fares shortly after its debut in Singapore.
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