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On May 17, two of Indonesia's largest tech companies, Gojek and Tokopedia, announced plans for a multi-billion dollar merger.

According to Nikkei Asia, the new GoTo group will cover everything from ride-hailing to digital payments and e-commerce, and become one of Southeast Asia's biggest tech powerhouses.

Combined past valuation of US$18 billion

The South China Morning Post (SCMP) reported that the merger is the "biggest ever" in Indonesia and one of the largest in Southeast Asia.

Based on historical fundraising for both companies, their combined past valuation was US$18 billion (S$24 billion).

Both are backed by heavyweight investors; including Google, Facebook, Tencent, Temasek, Paypal, SoftBank and Alibaba.

Gojek's Andre Soelistyo will lead the combined business as GoTo's CEO, while Tokopedia president Patrick Cao will become president of GoTo.

Competition in the region

The announcement comes one month after Grab, Singapore-based tech unicorn, said that they would be going public via a US$40 billion special purpose acquisition company (SPAC) deal.

Singapore-based Sea, which owns e-commerce platform Shopee, has also been expanding into food delivery and financial services in Indonesia, and making aggressive inroads into sectors dominated by Gojek and Tokopedia.

Top image via Tokopedia Youtube