HONG KONG (Reuters) – Tencent Holdings has invested around $100 million to $150 million in Indonesian ride-hailing startup Go-Jek, sources said, in another sign the Chinese tech giant was looking to tap into growth in Southeast Asia’s mobile-based services.
Go-Jek, which already counts global private equity firms KKR & Co LP, Warburg Pincus LLC and venture capital player Sequoia Capital as investors, is seeking to raise more capital from existing and new investors, the sources said.
The startup aims to raise up to $1 billion from its current funding round, the sources, who are familiar with the matter but did not want to be named, told Reuters.
A Go-Jek spokeswoman declined to comment on the company’s fund-raising plans, saying: “If there is information that we can share then we will share it.”
Tencent declined to comment on the investment.
An investment by China’s largest social media and online entertainment firm would indicate it wants to establish its presence in Southeast Asia that many expect will produce the next batch of high-valued tech startups known as unicorns.
Tencent, with a current market capitalisation of $341 billion, has previously bought a stake in Singapore-based gaming startup Sea Ltd, formerly known as Garena, which was valued at $3.75 billion after a March 2016 funding round.
Other Chinese tech behemoths have also been carving out their territory in Southeast Asia, home to more than 600 million people and some of the world’s fastest-growing economies.
Alibaba Group Holding last week said it would invest an additional $1 billion in Southeast Asian online retailer Lazada Group, boosting its stake by nearly a third to 83% and amplifying its focus on the region.
Alibaba’s domestic rival JD.com is in talks with Indonesia’s online marketplace Tokopedia for possible investment, a separate source told Reuters.
Go-Jek, which started as a hailing app for motorbike taxis, also operates a food delivery business that a source said yields a much higher margin than ride-hailing. Its mobile payment business, Go-Pay, is growing rapidly as it is complementary with all the other Go-Jek offerings, the source added.
Tencent and Alibaba have each invested in food delivery apps in China and have been fighting to gain market share in the mobile payment space with their respective platforms.
One of the sources said that Go-Jek aims to close the current funding round in the third quarter.
According to a media report, the start-up was valued at more than $2 billion when the funding round started.
Last August, KKR, Warburg and others invested $550 million in Go-Jek at an undisclosed valuation. Warburg is looking to chip in more in this round, sources said.
A spokeswoman for Warburg declined to comment.
(Reporting by Kane Wu and Julie Zhu in Hong Kong, Additional reporting by Eveline Danubrata and Agustinus Beo Da Costa in Jakarta; Editing by Himani Sarkar and David Evans)