PT GoTo Gojek Tokopedia Tbk (GoTo Group), the largest digital ecosystem in Indonesia, has secured $150 million from the International Finance Corporation (IFC), a member of the World Bank Group.

GoTo Group said in a statement that the duo have sealed a partnership to boost financial inclusion and sustainability across Indonesia.

The agreement underscores a shared commitment to ensuring more people can benefit from the digital economy and addressing climate change.

According to the statement, IFC’s strategic investment in GoTo reflects a shared vision to enhance access to new opportunities across Indonesia, highlighting GoTo’s position as an environmental, social, and governance (ESG) leader in the region and IFC’s reputation globally as a proponent of ESG practices.

The parties will collaborate on driving financial inclusion in Indonesia, where 97 million adults remain unbanked, as well as strengthening and refining GoTo’s ESG execution strategy.

“We are thrilled to partner with IFC, a global leader in sustainable development, as both our organizations aim to make a meaningful impact on society and the planet,” said Patrick Walujo, GoTo Group Chief Executive Officer.

“This partnership will provide additional support for our business as we seek to improve life for our customers, including consumers, driver partners and merchants, enabling them to achieve their financial goals and dreams,” he added.

According to the statement, the landmark partnership also includes non-financial support to help the company transition its fleet of driver-partners and delivery partners to electric vehicles, improving operational efficiency, and integrating more sustainable business practices to achieve carbon neutrality.

“We commend GoTo for the leadership it shows through its commitment to addressing the climate crisis as well as the support it provides for job creation, sustainable economic growth,” said Euan Marshall, IFC Country Manager for Indonesia and Timor-Leste.

“We see this investment as making an important contribution to amplifying those efforts, and also underscoring the power of technology and digitalization in improving lives and livelihoods across Indonesia,” he added.

According to the statement, the investment includes $125 million from IFC and $25 million from private investment firm Franke & Company.

The proceeds will be received through the issuance of new shares via a non-preemptive capital increase, and structured private notes to an independent entity, Bhinneka Holdings (22) Limited, which will concurrently issue equity-linked bonds to IFC and Franke & Company, in the amount of $150 million.

The equity-linked bonds issued by Bhinneka Holdings (22) Limited are exchangeable into Series A shares of the Company to be owned by Bhinneka Holdings (22) Limited at an exchange price of IDR 135 ($0.0087), which represents a premium of 50 percent to the one-month volume weighted average price of the shares up to and including 2 October 2023, being the last market date prior to the date of announcement.

The equity-linked bonds have a coupon of 5 percent per annum payable semi-annually, and will mature in October 2028.

The proceeds received by the company from the non-preemptive capital increase, will be used as working capital for the Company and its subsidiaries.

Citigroup Global Markets Limited and Goldman Sachs (Singapore) Pte. acted as Joint Placing Agents with regards to the equity-linked bonds issued to the investors.

In its approach to the ESG issues most material to the company and ecosystem, GoTo has established the Three Zeros commitments – Zero Emissions, Zero Waste and Zero Barriers by 2030.

Significant progress has been made to date, including an ongoing electric vehicle trial in South Jakarta, shifting to renewable energy for its direct operations, reduction in excessive packaging and single-use waste from on-demand and e-commerce services, and initiatives to facilitate financial inclusion and sustainable livelihoods for its driver-partners and merchants, among others.

GoTo Group aims to “empower progress” by offering technology infrastructure and solutions that help everyone to access and thrive in the digital economy.

The GoTo ecosystem consists of On-demand Services (mobility, food delivery, and logistics), E-commerce (third party marketplaces + official stores, instant commerce, interactive commerce, and rural commerce), Financial Technology (payments, financial services, and technology solutions for merchants) and Logistics (fulfillment and delivery) through the Gojek, Tokopedia, GoTo Financial and GoTo Logistics platforms.

IFC is the largest global development institution focused on the private sector in emerging markets.

The firm works in more than 100 countries, using its capital, expertise, and influence to create markets and opportunities in developing countries.

In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises.

Grab, GoTo may face new rules as Singapore reviews ride industry – report