Google, Temasek Are Said To Be In Talks To Invest Up To $1B In Tokopedia

Alphabet Inc’s Google (GOOGL) and Temasek Holdings are said to be in talks to join a funding round of between $500 million and $1 billion for Indonesian e-commerce giant PT Tokopedia.

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According to a Bloomberg report, Tokopedia, the online marketplace backed by Softbank Group’s Vision Fund, has also held talks with U.S. internet giants including Facebook Inc. (FB), Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN). However, Google and Temasek have been more active in their negotiations and those talks may conclude in coming weeks, the Bloomberg report stated.

The largest U.S. internet companies have in recent months looked for opportunities in Asia as growth in the U.S. and Europe stagnates, seeking to tap the region’s rapidly growing smartphone-savvy population. Facebook is snapping a stake in India’s Jio Platforms, while its WhatsApp unit last month announced an investment in ride-hailing and food delivery giant Gojek.

The backing of Google and Singaporean state investment firm Temasek would mark a major boost for one of Southeast Asia’s biggest e-commerce operators. Tokopedia co-founder and CEO William Tanuwijaya built the country’s most valuable startup after getting early backing from SoftBank founder Masayoshi Son and Alibaba Group Holding (BABA) co-founder Jack Ma. It now plans to list shares at home as well as in another as-yet-undecided location.

E-commerce platforms are now moving fast to meet the ever-increasing demand for online shopping during widespread lockdowns. Indonesia has become a key battleground between the regional rivals. The country’s e-commerce market is projected to expand from $21 billion in 2019 to $82 billion by 2025, according to recent study by Google, Temasek and Bain & Co.

Shares in Google have recovered since dropping to a low in March and are now trading 9.6% higher than at the start of the year. The stock increased 1.9% to $1,469.93 at the close of trading on July 2.

Indeed, the stock’s upside potential now looks more limited. The average analyst price target of $1,528.40 indicates shares have room to advance a modest 4% in the coming 12 months. (See Alphabet’s stock analysis on TipRanks)

Overall, the Wall Street rating outlook for Google remains bullish. The Strong Buy analyst consensus boasts 29 Buys versus 2 Holds.