Grab-GoTo merger could be ‘colossal’ for Indonesia’s fintech hopefuls, say analysts

[SINGAPORE] Amid a leadership reset and Jakarta’s push for a golden share of a potential Grab-GoTo merger, a 3.1 trillion rupiah (S$241.8 million) fundraising bid by Grab-backed Superbank could prove most critical for a merged entity’s fintech ambitions.

A Grab-GoTo merger would shake up the region’s ride-hailing and food-delivery markets, but the mega-deal could also send ripples through Indonesia’s digital banking industry.

Two of the country’s most promising digital banks – Bank Jago and Superbank – are, respectively, backed by GoTo and Grab, meaning that a merged entity could strengthen its grip on the country’s dynamic fintech scene.

“If the merger goes through, it could be colossal (for the industry)”, said Chulayuth Lochotinan, partner and head of Thailand at technology consultancy firm Capco.

Bank Jago, which counts GoTo and Singapore’s GIC among its backers, is one of the more established players in Indonesia’s nascent digital bank market. GoTo holds a 22 per cent stake in the bank, in a partnership that allows its GoPay e-wallet users to access banking services through the app. In 2024, the bank had the second-most customer deposits among the country’s digital banks, second only to SeaBank. A Maybank report in September listed 10 licensed digital-only banks in the country, of which seven – including Bank Jago – are profitable.

Singapore-headquartered Grab has held an indirect stake in Superbank since 2023 through three entities, accounting for a 42.2 per cent interest in the bank’s shares.

The bank has yet to reach full-year profitability. It posted a 366.4 billion rupiah net loss in 2024, amid its public launch in June that year.

But it made a sharp turnaround in its recent third-quarter results, posting a net profit of 60.13 billion rupiah, as loan disbursement and net interest income surged.

Still, Superbank’s total assets and loan book remain small relative to more established players such as Bank Jago and SeaBank.

This could change quickly, with Superbank announcing its plans to raise 3.1 trillion rupiah through an initial public offering (IPO) in mid-December, in what could be one of the country’s largest fintech listings in recent years.

A successful IPO for Superbank would provide the bank with capital to support growth, regardless of the outcome of the merger, said Jayden Vantarakis, head of Asean equity research at Macquarie Capital. The bank had announced that 70 per cent of funds raised would be used to support working capital needs, mainly to expand its loan book.

“If Grab and GoTo merge, one of the benefits is scale,” noted Capco’s Chulayuth. “The banks can leverage shared architecture and data analytics engines.

“This would lower their costs and maximise their ability to offer good products, cheaper transfers and higher interest on savings for their customers,” he said.

A Grab-GoTo merger, along with a successful IPO for Superbank, could also chart a clearer path towards profitability for the Grab-backed lender.

Anosh Pardiwalla, head of Indonesia at Oliver Wyman, told The Business Times that the bank would need to demonstrate its ability to break even to its investors as it looks to list publicly.

“Competing against a ‘sister’ bank, such as through offering heavy discounts, is not an effective strategy,” he said. “Two digital banks offering similar products may create distractions and some cannibalisation.”

If the merger comes to pass, Superbank and Bank Jago could focus on discrete segments, making them complementary rather than competing, Pardiwalla said. “The challenging question then will be one of focus.”

This could mean integrating Superbank’s banking services more firmly into the merged superapp’s platform. For Bank Jago, however, this may spell uncertainty for its future within the platform’s ecosystem.

“If a merger between Grab and GoTo eventuates, we are of the view that the combined platform would focus their efforts on a single banking presence,” said Macquarie’s Vantarakis. “There is tighter alignment between Grab’s ecosystem and Superbank than there is between GoTo and Bank Jago.”

He added: “They don’t need to own two banks. This raises a question around the business model for Bank Jago and its long-term growth.”

Nevertheless, he added that the two digital banks still have distinct shareholder groups apart from the two ride-hailing giants – which likely rules out a Bank Jago-Superbank merger.

Regional tie-ups

Importantly, this is not Grab’s only venture into digital banking. The Nasdaq-listed superapp is also a significant shareholder in GXS Bank, along with telecommunications conglomerate Singtel.

GXS, which offers both digital consumer and business banking services, began lending in Singapore in August 2022; its Malaysia subsidiary GXBank launched its services there in November 2023.

Much like Bank Jago’s integration within GoJek’s platform, customers can also use Grab’s platform to create GXS or Superbank accounts.

This presence across South-east Asia could offer the merged entity a stronger hold, not only on the region’s ride-hailing market, but also its digital lending space.

“If Grab and GoTo manage to merge, it will be significant for Indonesia and have wide implications for South-east Asia because it would make (the merged entity) a pan-Asean digital play,” noted Capco’s Chulayuth.

“If you are a merchant based in Malaysia, Singapore or Indonesia, it would be easier to transact and do business across the region,” Chulayuth suggested.

“There is a lot of knowledge transfer and learning that can be passed on,” noted Oliver Wyman’s Pardiwalla.

For instance, greater capacity for data-sharing within a merged superapp ecosystem could lead to synergies in the financial services space across the region.

“GoTo and Jago already use alternate data for credit decisioning, which Grab also does to an extent,” said Pardiwalla.

“This learning can be shared across to the other GXS banks where they can embed it into their relationships with Singtel and the Kuok Group,” he said.

Still, Chulayuth noted that harmonising regulations among the operations in these three countries could pose challenges to larger regional ambitions.

“But once they get through (regulatory obstacles), it is going to be easier for users in these countries to gain access to cross-border financial services,” he said.