GoTo’s debut shows the global IPO window is not entirely closed

GoTo, the combined entity resulting from the merger of Gojek (an Indonesian ride-hailing player) and Tokopedia (an Indonesian e-commerce company), raised around $1.1 billion (IDR15.8 trillion, per the company) in its public-market debut on the Indonesia Stock Exchange (IDX) earlier this month. GoTo most recently raised a $1.3 billion round in late 2021, in what was then described as pre-IPO funding.

GoTo’s IPO can be considered a success, pricing shares at 338 Rupiah apiece and trading as high as 442 Rupiah, per Yahoo Finance data. GoTo has given back some gains since its opening trades, but is still worth more per share than where it priced. The company most recently closed at 358 ​​Rupiah, off a little more than 5% in its most recent trading session.

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The IPO market is moribund across the globe today, most notably in the United States, where many technology companies have historically listed. GoTo initially detailed interest in dual-listing, but ultimately decided to only list on the Indonesian exchange.

Given the generally glacial global IPO climate and the fact that GoTo managed to float without sinking, The Exchange got curious. This morning, let’s explore the company’s financial performance and resulting multiples.

From there, we’ll consider its market of choice as we work to better understand how it seems that no high-growth tech company can go public in the United States, but a mammoth listing in the less-busy Indonesian market was feasible.

Financials

At the time of the merger of Gojek and Tokopedia, the company reported a combined gross transaction volume (GTV) of $22 billion in 2020. It was already a large concern, in other words.

More recently, the company said that in the 12 months concluding September 30, 2021, it accreted $28.8 billion in total GTV. That’s growth, if not rapid growth from a platform spend perspective.

Leaning on Deal Street Asia’s summation of GoTo’s anticipated results sourced from a document “created for investors,” the company expected to scale from 3.328 trillion Rupiah ($231.7 million) in 2020 net revenue to 6.258 trillion Rupiah ($435.8 million) in 2021. Looking ahead, estimates for the company push its net revenue number to 10.696 trillion Rupiah ($744.8 million) in 2022.

Today, GoTo is valued at 424 trillion Rupiah, per Yahoo Finance data. That works out to a market cap of $29.53 billion. From a very loose multiples perspective, the company is valued at a forward (2022) net revenue multiple of just under 40x, a number that is far from cheap.

Are investors bonkers to pay so much for GoTo stock?