GoTo Group has signed a new cloud services agreement with Alibaba Group Holding Ltd, which includes a commitment from Alibaba to maintain its current stake in the Indonesian ride-hailing and delivery provider for the duration of the deal.
This partnership could provide a boost to GoTo’s stock, which has fallen approximately 80% since its 2022 initial public offering, following share reductions by Alibaba and other major investors. Alibaba, an early investor, has decreased its stake from around 9% in 2022 to about 7.5% by selling billions of shares.
Under the terms of the five-year agreement, GoTo will leverage Alibaba's cloud infrastructure to support its extensive range of services, including ride-hailing and delivery in Indonesia and Singapore. This deal offers Alibaba a significant foothold in Southeast Asia, where its cloud division has faced intense competition. Although the companies did not disclose the deal’s value, it was confirmed through a non-binding memorandum of understanding. Previously, GoTo also signed a cloud services deal with Alphabet Inc’s Google.
Facing intense competition from Singapore’s Grab Holdings Ltd in the Southeast Asian market, GoTo has taken steps to control costs by slashing jobs and exiting markets like Vietnam and Thailand. Late last year, it transferred control of its loss-making e-commerce unit, Tokopedia, to ByteDance Ltd’s TikTok in a US$1.5 billion (RM6.4 billion) deal.
Since Patrick Walujo took over as CEO last year, GoTo has made strides toward profitability and recently reiterated its expectation to achieve positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the full year.
With over 50 million users, GoTo's alignment with Alibaba represents a strategic move for both companies in a highly competitive sector.
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