SoFi Blog

Facebook and PayPal Back Indonesian Startup Gojek

Facebook (FB) and PayPal Holdings (PYPL) invested an undisclosed amount in Gojek, an Indonesian food delivery and ride-hailing service.

Gojek, Indonesia’s biggest startup, raised $1.2 billion in this latest funding round, bringing its valuation to $10 billion. Facebook and PayPal join other international tech giants already backing the company, like Google (GOOGL), and Chinese conglomerate Tencent Holdings Ltd. (TCEHY).

With Facebook’s investment, Gojek will be able to increase its online presence using WhatsApp. “WhatsApp helps small businesses communicate with customers and make sales, and together with Gojek, we believe we can bring millions of people into Indonesia’s growing digital economy,” WhatsApp COO, Matt Idema, wrote in a recent blog post .

As for the partnership with PayPal, Gojek is hoping to provide users of its digital wallet, GoPay, access to PayPal’s 25 million merchants throughout the world.

Gojek and Grab Compete for ‘Super App’ Status

The investments from Facebook and PayPal bring Gojek one step closer to becoming Southeast Asia’s biggest “super app,” an app with multiple services bundled into one.

Gojek’s biggest competitor is Grab, a Singapore-based app, which also offers a variety of services like ride-hailing, food delivery, and digital payments.

Both Gojek and Grab are working on adding services in the hopes of becoming the default app for Southeast Asian consumers in the way Tencent’s WeChat operates as a “super app” in China. For example, Gojek began as a way to hail motorbikes and now, just five years since its launch, it offers a multitude of other services like medicine delivery and house cleaning.

Investments in Southeast Asia Expand Beyond Gojek

It makes sense why Facebook and PayPal would invest in Gojek right now because Indonesia currently has the fastest-growing internet economy in Southeast Asia. It is expected to be worth $130 billion by 2025. Southeast Asia’s total digital economy will be worth an estimated $300 billion in five years.

Gojek was Facebook’s first investment in an Indonesian company, but it has made other investments in Southeast Asia before. In fact, Facebook recently pumped $5.7 billion into Indian telecom giant Jio Platforms Ltd, the biggest mobile carrier in India.

Companies like Facebook and PayPal are capitalizing on the booming Southeast Asian digital economy, and are looking for ways to get involved with more small and medium-sized companies within those markets.

After several quiet months, the Las Vegas Strip is about to get busier today as the city reopens casinos.

Consumers Seek Healthy, Long-Lasting Foods

The price of orange juice has increased by 30% since January. Demand for Vitamin C-rich foods has skyrocketed as consumers try to stay healthy during the COVID-19 pandemic. Additionally, this year’s orange crop is projected to be smaller than usual. The combination of increased demand for orange juice and lower supply of oranges is driving OJ prices to record highs.

The orange juice industry has faced challenges over the past decade as people have become more wary of sugary drinks. However, OJ is regaining popularity both because of its high Vitamin-C content and because it lasts longer than fresh fruit. At a time when people are visiting the grocery store less frequently to avoid the risk of infection, demand for foods with longer shelf-lives is up.

Orange Grove Conditions in Florida and Brazil

The spike in demand for oranges has been so rapid that farmers may not be able to keep up. This year, orange groves are set to produce about 1.6 million metric tons of crops. A decade ago, when orange juice was more popular, a typical harvest was 2.5 million tons.

The orange industry is also looking toward what is projected to be a difficult hurricane season in Florida, an important orange-growing region. Brazil, which is also a key orange producer, has already seen its crop damaged by bad weather conditions, pushing the yield to one of the country’s lowest in two decades.

Looking Ahead

Despite rising prices, Americans are still eager to stock their fridges with orange juice. Between mid-March and mid-April, Americans bought 44 million gallons of OJ—a 46% jump from the same period last year.

Because of the supply-demand imbalance, orange juice futures traded in New York have increased by about 27% so far this year. The market could see orange prices climb above 2016’s record of $2.35 per pound.

So far this year, orange juice has been the world’s top-performing commodity. Investors will be carefully watching growing conditions and trends in demand to see if OJ prices will continue their upward climb.

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