Go-Jek has been working to enter the Philippines market for the last month but has finally discovered that they cannot be victorious, citing foreign ownership concerns as their barrier. However, the Indonesian ride-sharing platform has decided to move on to other progress, as they establish a partnership between themselves and Coins.ph. Coins.ph is a local crypto wallet and payments platform in the Philippines.
Presently, the Filipino firm is working on their launch of a beta version of the Coins Pro waiting list. Coins Pro will ultimately become a crypto exchange, though it is presented in the developing stages at the moment. As such, Go-Jek established a majority stake in the business of the payments platform with a “substantial investment.” Unofficial sources estimate that the transaction was worth $72 million, which is “substantial” because no other acquisition has cost them so much.
Go-Jek has spent the last eight years working towards their current scalability of over six million transactions on a monthly basis. Coins.ph, on the other hand, was only launched in 2014, though a total of four funding rounds has brought in $10 million from investors.
The Indonesian platform is known as a tech giant in the industry, which has brought with it the support of Tencent and Google, has been working to break into the ride-sharing market. The application of subsidiary Velox Technology Philippines has been denied by the Philippines Land Transportation Franchising and Regulatory Board (LTFRB). According to the chairman, Martin Delgra, the firm
“did not meet the citizenship requirement and the application was not verified in accordance with our rules.”
The subsidiary is completely owned by Go-Jek. Grab, a Singapore-based competitor to the firm is complying with the local ownership limitations, which has made them a major player in the ride-hailing market of the area. The application was submitted in August by Velox, during a time when the regulatory changes were not in effect.
Go-Jek’s platform only requires one stop for consumers to gain access to food and other services, like making online payments. The contributing investors have allotted over $3.3 billion to them, so their discouraging rejection will not likely hold the company back for long.
President Rene Santiago of Bellwether Advisory said,
“Homegrown firms are not making a dent on early-player Grab, because the cars they can enroll now have to go thru the LTFRB’s filtering hurdles.”
Furthermore, there is already a restriction imposed on the registered ridesharing vehicles to 65,000, due to a decision made by the Philippines Department of Transportation. Right now, there are already eight firms that have taken over 37,000 of those vehicles.
It was not until two weeks after the rejection that Go-Jek announced their acquisition of Coin.ph. They stated that their intentions are
“to support Coins.ph in its rapid growth to meet the financial needs of all Filipinos.”
Investors have the option of purchasing Bitcoin, Bitcoin Cash, and Ethereum on the Filipino-based platform, while also using crypto for online payments.
Ron Hose, CEO, and co-founder of Coins.ph, states that he was intending to start new funding round when the opportunity to partner with Go-Pay arose. He said,
“We are very proud to showcase the success of Philippine startups. In just a few years, our team has been able to build a scalable service extending financial services to millions of Filipinos.”
Since Go-Pay launched in 2016, they have been responsible for over half of the transactions that Go-Jek hosts.
Founder and CEO of Go-Jek, Nadiem Makarim, said,
“We are humbled to take part in the country’s digital payments transformation, through technology and empowerment of fintech small-medium businesses. […] Today’s announcement marks the start of our long-term commitment to the Philippines and a continuation of our mission to use technology to improve everyday lives and create a positive social impact.”
Though there is plenty of uncertainty over where this acquisition will go from here, it is clear that Go-Jek has not given up its hope of entering the Philippines.
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