PT GoTo Gojek Tokopedia (GOTO) has officially announced the completion of TikTok's US$ 2.3 billion (IDR 36.2 trillion) investment in Tokopedia, following an agreement reached on December 11, 2023.

According to the disclosure document released on January 31, 2024, GOTO's management stated that TikTok now holds 75.01 percent of Tokopedia's shares, while the remaining 24.99 percent is retained by GOTO.

"Today we completed the cooperation transaction with TikTok, which will continue to benefit Indonesia and Small and Medium Enterprise (SME) stakeholders," said Patrick Walujo, CEO of GoTo Group, in a press release.

"This is also a significant step for GoTo Group. After achieving positive adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) in the fourth quarter of 2023, we will accelerate our growth, including through support and collaboration with the company's business partner ecosystem," he emphasized.

As GoTo progresses towards profitability and improved cash flow, Patrick mentioned that the company will optimize capital usage and is currently planning the allocation of future capital.

This plan includes various initiatives, including the potential buyback of shares, contingent on regulatory approval and shareholder consent.

This announcement signifies that GOTO is beginning to earn commissions from transactions on the "new Tokopedia" platform. Simultaneously, GOTO will no longer bear the burden of Tokopedia's business.

Importantly, this event marks a new chapter for Tokopedia with full support from TikTok, providing ample resources to re-enter the growth path and expand its market share in Indonesia's e-commerce sector.

"On January 31, 2024, the parties completed the transaction through the settlement of share transactions, where Tokopedia issued new shares to TikTok Nusantara, resulting in TikTok Nusantara owning 75.01 percent of the issued shares of Tokopedia," stated GOTO's information disclosure.

The investment structure from TikTok to Tokopedia is detailed in three schemes: Tokopedia's acquisition of TikTok Shop assets operating in Indonesia for US$ 340 million (approximately IDR 5.3 trillion), TikTok Nusantara's acquisition of 75.01 percent of new Tokopedia shares for US$ 840 million (approximately IDR 13.2 trillion), and Tokopedia receiving Promissory Notes worth US$ 1 billion (approximately IDR 15.7 trillion) from TikTok for working capital.

Another interesting aspect is the non-dilutive ownership clause held by GOTO. This clause ensures that GOTO's ownership in Tokopedia will not be diluted with future capital injections.

Stephanie Susilo, Executive Director of E-commerce at TikTok Indonesia, added that they are proud to officially welcome Tokopedia and all stakeholders and employees.

"We see this moment as an important achievement in fulfilling our commitment to contribute more to Indonesia, SME stakeholders, and the growth of the digital economy together with GoTo as our partner," she stated.