JAKARTA — Gojek, the Indonesian developer of a popular app aimed at satisfying a wide range of daily needs, announced Wednesday that it will shut down all but two of the lifestyle services offered on its platform.
The move comes as startups come under increasing pressure to show a path to profitability. Investors are growing leery of cash-burning companies in the wake of the high-profile travails of U.S. office-sharing startup WeWork. Gojek’s decision shows that Indonesia’s only “decacorn,” as startups valued at over $10 billion are called, is not immune from the trend.
Of the seven services currently offered on GoLife, a separate app that Gojek spun off in 2017, only GoClean, a housekeeping service, and GoMassage, which sends massage therapists to people’s homes, will stay in business. The two services account for 90% of orders on the platform, according to the company. The rest, including GoGlam, a beautician booking service, and GoFix, a home appliances repair service, will be discontinued in December and January.
“We believe that reviewing and optimizing the performance of our products and services is essential to meet the evolving needs of consumers, and for future growth,” said Wesly Simatupang, head of GoLife. “We have communicated these changes to all those affected and have offered [partners] opportunities to continue providing relevant, alternative services within or outside of the Gojek ecosystem,” he added.
Gojek is the second big Indonesian startup to announce a shake-up of its operations. E-commerce unicorn Bukalapak laid off almost 10% of its 2,000-strong workforce in September as it tries to put its finances on a sounder footing.
These moves reflect changing sentiment among investors, who had previously favored growth above all else. After disappointing initial public offerings by U.S. ride hailers Uber and Lyft, and a botched IPO by loss-making WeWork forced a drastic revaluation of the company, investors are taking a harder look at profitability.
Gojek, which began as a call center for motorcycle taxis and rolled out its eponymous app in 2015, recently saw its founder and CEO Nadiem Makarim leave to become Indonesia’s education minister. His successor, Kevin Aluwi, told the media in October, that as Gojek moves from startup to “an enduring company,” he and co-CEO Andre Soelistyo will take a “much more measured approach” in running the company.
Although Aluwi still considers Gojek to be a “growth company,” he said he and Soelistyo will be “a lot more process-driven, to really focus the company on the right things, versus probably too much experimentation in adjacent things.”
Gojek is conducting its Series F funding round and hopes to raise around $2 billion.
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