Go-Jek hopes to draw 'hundreds of thousands' of customers in Singapore

  • Indonesia's first "unicorn," Go-Jek will launch its app in beta version in Singapore on Thursday.
  • It expects to draw "hundreds of thousands" of users in Singapore during the beta testing period.
  • Its entry into Singapore will likely mean heated competition with another Southeast Asian unicorn, Grab.
Go-Jek's president Andre Soelistyo (left) and Go-Jek's global head of transport, Raditya Wibowo speak at the company's press conference for its beta launch in Singapore
CNBC
Go-Jek's president Andre Soelistyo (left) and Go-Jek's global head of transport, Raditya Wibowo speak at the company's press conference for its beta launch in Singapore

Ride-hailing service Uber has made its exit from Southeast Asia — and now the battle between two of the region's most valuable start-ups is beginning.

Go-Jek, Indonesia's first "unicorn" — tech-speak for a startup that's believed to be valued at $1 billion or more — is taking the competition to rival Grab's home turf in Singapore.

Go-Jek launched the beta version of its ride-hailing app in Singapore on Thursday. The early, test version of the app will let customers book rides, though they can only be picked up and dropped off within a number of limited areas currently.

Despite that, the Indonesian company is confident of its ability to attract customers in Singapore.

"In the last four years of our life in Indonesia, we've fought two big giants, and we've been able to continue to be the most dominant player in Indonesia. I think we have some tricks in our sleeves to be able to compete with some of them." -Andre Soelistyo, president, Go-Jek

Go-Jek's global head of transport Raditya Wibowo said the beta phase will commence with a few thousand riders, but the company hopes to serve "hundreds of thousands" of users before its full launch, expected to be in early 2019.

The start-up is working with DBS, one of Asia's largest banks which claims millions of customers in Singapore. The partnership means that DBS customers will get priority in using the Go-Jek app ahead of others and will receive credit for their first two rides.

Go-Jek president Andre Soelistyo told reporters in Singapore that the company will give promotion codes initially, but stressed that it wants to differentiate itself in the "little details."

"In the last four years of our life in Indonesia, we've fought two big giants, and we've been able to continue to be the most dominant player in Indonesia. I think we have some tricks in our sleeves to be able to compete with some of them," he said.

Big plans for Singapore and Southeast Asia

Go-Jek is popular in Indonesia, which with more than 260 million people is the fourth-most populous country in the world. The company processes more than 100 million transactions for its 20 to 25 million monthly users.

Wealthy and much smaller Singapore is part of Go-Jek's plan to expand in Southeast Asia. The company said it will invest about $500 million in the region, and it recently launched motorbike ride-hailing services and food delivery in Vietnam. The company says it's poised to enter Thailand and the Philippines as well.

The company said it still sees a need to invest heavily in Southeast Asia.

"We're still in the investing phase, which means that the company is not yet profitable, although some products are profitable," Soelistyo said.

Go-Jek has raised more than $2 billion from investors since 2016, much of it from very big names: Google, Chinese tech giants Tencent and Meituan-Dianping, as well Singapore's Temasek Holdings.

Go-Jek's entry into Singapore will bring it head to head with Grab, which is headquartered in Singapore. Grab offers services similar to Go-Jek's, such as food delivery and mobile payments.

Grab has garnered more than $6 billion in funding and is backed by SoftBank, Chinese ride-hailing firm Didi Chuxing and Toyota.

Lim Kell Jay, who heads Grab Singapore, said the company welcomes competition.

"We believe more choice in the market enables innovation and promotes a higher level of service in the industry," he said in an email, adding that Grab wants to fulfill its goal of "becoming Singapore's everyday superapp."

Grab has already challenged Go-Jek on its home turf. The company sent CNBC a note from research firm ABI Research that indicates that Grab held 62 percent of the ride-hailing market in Indonesia as of June this year.