If you thought the battle between Southeast Asia’s ride-hailing leader Grab and its Indonesia-headquartered foe Gojek couldn’t get any more intense, it has.
Gojek pushed its business across Southeast Asia last year, and Singapore-based Grab has spent the last two years trying to unseat its rival in its native Indonesia. The fundraising battle has gone stratospheric with both sides raising billions; Grab’s last round was $6.5 billion and its investors span SoftBank, Toyota and Microsoft, while Gojek is in the process of completing a round of at least $2 billion from a cast of backers that include Google, Tencent and Mitsubishi.
Then, in an unexpected curveball, Gojek’s founder and CEO Nadiem Makarim announced his departure from the company. His exit is a win for Indonesia, since Makarim quit the job to become minister of education and culture in President Joko “Jokowi” Widodo’s cabinet.
The unusual move makes Makarim, only 35 years old, the youngest minister Indonesia has ever seen. A more classic exit for contemporary startup founders would have come after a milestone such as an acquisition or IPO. Or involuntarily after a major misstep. Neither scenario is true in Gojek’s case.
Makarim’s sudden departure had some at Gojek’s arch nemesis, Grab, assess their own leader’s potential to follow a higher calling.
“Our biggest risk is Anthony starting a church somewhere,” an executive at Grab told The Ken under the condition of anonymity to avoid upsetting CEO Anthony Tan, who is known for his devout following of Christianity.
Tan may well become a pastor in the future, but for now his faith and efforts are entirely focused on ride-hailing and the myriad of other “super app” services that Grab invests in. Especially as it rivals Gojek in the bid to become the daily app for Southeast Asia’s 600 million-plus population.
The biggest challenge Gojek will face without Makarim at the helm is maintaining continuity and alignment inside of what has become a gargantuan structure.
All the while both companies are facing increasing pressure to improve their financials. Some observers have suggested Makarim’s exit may lead Grab and Gojek towards an inevitable deal. That would put an end to their costly rivalry.
The new era for Gojek
Grab has a more traditional corporate look to its structure, but Gojek is a company made out of companies. Its top management includes entrepreneurs whose startups were strategically acquired, often with their entire teams in tow.
That might work in the firm’s favour, because the units act independently, but it’s also a recipe for friction.
“Gojek has a very unique structure that can allow it to survive major leadership change,” Willson Cuaca, co-founder and managing partner of VC firm East Ventures, told The Ken in an interview. “As long as they still align their vision.” East Ventures is a rare example of an investor that has portfolio exits to Grab and Gojek, having sold payment company Kudo and ticketing startup Loket, respectively.