Emtek Group makes US$375mil investment into Grab Indonesia, both aim to be key driver to accelerate digital adoption

• Accelerate digital transformation for MSMEs in Tier 2 and Tier 3 cities
• 1st initiative an accelerator for MSMEs with solutions by Bukalapak & Grab

Elang Mahkota Teknologi Tbk (Emtek Group), one of Indonesia’s leading technology, telecommunication, and media conglomerates, and Grab announced a strategic alliance on 26 July with the former investing US$375 million (RM1.59 billion) into PT Grab Teknologi Indonesia is a deal that will bring together two of Indonesia’s largest digital ecosystems. Months earlier, in April, Grab made an investment into Emtek Group which Singapore’s The Straits Times reported to be at around US$270.5 million (RM1.15 billion) for a 4% stake. With the strategic partnership, both companies plan to support the development of a more digital Indonesia by leveraging on the scale and strengths of their respective ecosystems to drive two objectives: first, accelerate digitalization and create more income opportunities for millions of small businesses and everyday entrepreneurs in Indonesia; second, create more accessible digital offerings that offer greater convenience for everyday Indonesians, even in the least digitized areas.

Both companies will also explore potential collaborations across logistics and e-commerce, in financial services, telemedicine, advertising and digital media, as well as digital products for traditional kiosks or warungs.

“Indonesia’s bright digital future should be shared by all. Grab and Emtek Group share this vision and are aligned with our approach of building open ecosystems to help solve some of Indonesia’s biggest challenges. As Indonesia moves towards Industry 4.0 we hope that no one will be left behind, and our joint commitment is to help create opportunities that are available to everyone,” said Ridzki Kramadibrata, President of Grab Indonesia.

Describing the Grab Indonesia team as a kindred spirit, with a commitment to innovation, and proven on-ground execution, Sutanto Hartono, Managing Director of Emtek Group, said, “we are excited to work with them to strengthen digital infrastructure and build a more inclusive digital economy in Indonesia.”

The Minister of Cooperatives and Small and Medium Enterprises, Teten Masduki, said “The government aims to have 30 million SMEs go digital by 20241, and we are grateful that companies like Grab and Emtek Group have taken up the mantle to help our MSMEs in transforming their operations digitally. It is my hope that the strategic partnership between Grab and Emtek Group will also reach more underserved MSMEs such as those run by entrepreneurs with disability or elderly entrepreneurs.”

An immediate priority for the collaboration is to bring greater digitalization to the outer cities of Indonesia. 99% of all businesses in Indonesia are MSME businesses, but only 21% have any digital presence. Grab and Emtek Group’s will host Festival Kota Mapan, an extensive accelerator program targeting MSMEs located in tier 2 cities of Indonesia.

The first Festival Kota Mapan will be held in Solo in September 2021, will target 1,000 MSMEs with a focus on an integrated assistance program aimed to enhance their capabilities through curated and intensive training programs, and customized technology solutions supported by Bukalapak, GrabFood, GrabKios, and GrabMart.

MSMEs to be able to stay afloat and continue to thrive during this prolonged pandemic will need support from both the public and private sectors.

Festival Kota Mapan adds to existing collaborations between Emtek Group and Grab. Grab already has partnerships with Bukalapak to provide instant and same-day deliveries through GrabExpress, and GrabKios digital products such as mobile top-ups on the Mitra Bukalapak platform for kiosk owners in 500 cities. Grab and Emtek Group will also explore joint opportunities to invest in and mentor Indonesian startups, through KMK Online and Grab Ventures Velocity.

Neneng Goenadi, Country Managing Director of Grab Indonesia adds that they are keen to tap into Emtek’s broad media network and all-commerce capabilities of Bukalapak. “(This) is aligned with our commitment to empowering MSMEs to go online and provide digital service for mom and pop shops. Together, we’re committed to bringing more digital solutions to support economic recovery in Indonesia.”

Emtek Group’s diversified portfolio spans media businesses with SCTV and Indosiar as two leading national free-to-air TV networks with combines more than 26% audience share, over-the-top platform Vidio that has more than 70 million users and ranked as #3 biggest OTT in Southeast Asia, and other digital businesses such as all-commerce marketplace Bukalapak, online publisher KLY, solutions businesses, and healthcare with the ownership of 6 hospitals. Grab is the #1 app for ride-hailing and online food delivery in Indonesia which also offers a suite of other everyday services including GrabKios, GrabMart, GrabHealth and more. Over the past three years, Grab's driver-, merchant- and agent-partners have collectively earned more than IDR92 trillion (US$6.5 billion) through the Grab platform.