The Valuation Of GO-JEK 12X Higher Than GARUDA, “Kok Bisa?”
In the last funding round, GO-JEK’s valuation has been valued by its investors worth IDR 75 trillion. An epic number for the company that just stood a few years ago. While from the value of existing share, GARUDA Indonesian’s airline valuation is only IDR 6 Trillion. That means the valuation of GO-JEK is 12 times more valuable than GARUDA Indonesia.
Why did it happen?
Definition of company valuation
Valuation means the selling price of a company in the eyes of its investors. Company valuation is considered very important to do for a company. This is intended to see how big the development of the business is run by the company. A good valuation level tends to be a reference for the success of the company’s value levels both in terms of fundamentals and relative aspects.
Why is GARUDA Indonesia’s valuation relative badly?that’s simple question. GARUDA’s valuation is bad because they have IDR 40 Trillion of debt. Massive debt figures. Debt of this size were used to buy new aircraft, if the debt is IDR 40 Trillion, assuming the debt interest only 10%/year, then GARUDA needs IDR 4 Trillion cash per year just to pay the interest, ONLY FOR THE INTEREST. A very dark debt burden.
Why can GO-JEK’s valuation go through IDR 75 Trillion?in the past, business valuations focus more on tangible asset or physical assets of factory assets, land, buildings and other physical assets. Whereas today, intangible assets are considered more advanced. And then in digital era, intangible assets that are very expensive are app and digital platform.
The GO-JEK or GO-PAY application is very expensive because of internet, the application can reach millions of customer instantly, almost no cost at all. Only with digital connection, the current estimate of GO-PAY has reached around 30 Million customers, without the help of any branch office or teller. Branchless operation.
So Gojek’s valuation that is currently penetrating IDR 75 trillion is due to factors:
- The power of digital app – their application can reach tens of millions of customers super efficiently with only with internet.
- Investor optimism that later GO-PAY will master digital payment in the country.
https://www.investopedia.com/terms/v/valuation.asp
About Post Author
