Gojek driver
Image: Andika Wardana, Pexels

Protocol Index: Facebook’s Gojek bet

Protocol Index

Good morning! This Wednesday, Facebook makes another big bet on Asia, why being European might be an advantage right now, and what's going on with police-tech stocks. Want Index in your inbox each morning? Subscribe here.

What Matters Today

  • ZoomInfo is expected to price its IPO today, according to Bloomberg. Yesterday, the company raised its expected pricing: It now expects to raise as much as $890 million, up from the $801 million initially forecast.
  • We'll also get earnings from a bunch of small enterprise-tech companies, with Cloudera, Smartsheet, Elastic and Zuora all reporting after markets close.

Layoff Watch

  • Civil, a blockchain-based news startup, is shutting down. Its eight-person team will move to ConsenSys, Civil's largest investor.

Today's News

As of 4:45 a.m. PDT: Nasdaq Futures: 0.31% | Euro 600: 1.13% | Nikkei: 1.29% | Hang Seng: 1.37%


  • The U.S. said it would launch a Section 301 probe into digital taxes in ten jurisdictions, including the U.K, the EU, India and Indonesia. The investigation will look at whether the taxes discriminate against U.S. companies. A similar probe was used to authorize tariffs on China.
  • Zoom earnings beat expectations, with first-quarter revenue up 169% year-on-year and earnings-per-share double what analysts expected.
  • Lyft said demand was up 26% month-on-month in May, though it was still down 70% from a year ago.
  • Nidec, the world's largest motor manufacturer, will reportedly open a Chinese R&D facility in the face of trade war risks.
  • India said it will invest $6.65 billion to boost electronics manufacturing, with an initial plan to court smartphone makers.
  • Japanese crypto exchange DeCurret will work with banks and the Japanese government to establish a digital payment infrastructure.



  • Playtika, a Chinese-owned Israeli game developer, has reportedly hired banks for a U.S. IPO that could raise $1 billion at a $10 billion valuation.
  • PCCW is reportedly considering a $1 billion sale of PCCW Global, its international enterprise business.
  • SoftBank launched a $100 million fund to invest in companies led by people of color. It said it would donate some of the gains from the fund to PoC-focused organizations.

Everyone's Thinking About

Facebook makes another Asian bet

Facebook and PayPal have invested in Gojek, the Indonesian super-app announced last night. Along with Facebook's recent Jio investment, it's a clear sign that tech is hyper-focused on Asia.

  • Gojek started off as a ride-hailing service, but has since expanded into a giant, WeChat-esque platform. It's got all the usual offerings — food delivery, ecommerce, mobile payments, movie tickets, streaming, the list goes on — and almost 40 million monthly active users.
  • Those users are concentrated in Indonesia, a country Facebook's been interested in for a while. In August of last year, Reuters reported that Facebook was in talks with local payment services to offer WhatsApp Pay in Indonesia. Gojek will be that partner, it seems, though neither company has given details on how the apps will integrate.

This is more evidence that Facebook is pursuing a partnership model in Asia, rather than its Western approach of full-on domination.

  • As I reported last week, Facebook has struggled to navigate Indian regulations, and the above Reuters story reports that Facebook decided not to offer P2P payments in Indonesia thanks to complicated legal issues.
  • Working with local partners like Jio and Gojek helps solve that problem — and its financial investment lets Facebook benefit from their success more broadly, too.
  • It comes at a cost though: Facebook has to give up some control and split some of the profits. Bit it seems the company's decided that's a worthwhile tradeoff.

It's not all about Facebook: The PayPal deal is interesting too.

  • It sounds like it'll be a mutually beneficial partnership: Gojek users will be able to pay with PayPal, and PayPal merchants will be able to accept GoPay payments.

That should help both companies get ahead of SoftBank-backed Grab, Gojek's fiercest rival.


  • "The Uber/Lime deal showed that this market is a natural duopoly." — NGP Capital's Paul Asel said the scooter market's "move towards efficiency is happening irrespective of COVID-19.
  • "70% [of Indian online lenders] are staring at an existential crisis." — An anonymous online lending CEO told Reuters that rising defaults could hit poorly-capitalized fintechs.
  • "It's too early to call the demise of the Indian outsourcing industry." — Siana Capital's Sid Pai thinks reports that Poland will take away Indian business are overplayed.
  • "We are not going to invest in a company without meeting the team directly." — Five Seasons Ventures' Niccolo Manzoni is not a fan of remote investing.
  • "Vision Fund 2 largely depends on whether Saudi Arabia will participate. That is looking less likely to happen now." — A "major asset management" executive told the Nikkei Asian Review that SoftBank's investment outlook was uncertain.


A good time to be European

It's probably not the best time to be in the travel tech industry. But for Jannik Lawaetz, CEO of Danish startup LuggageHero, it could be worse.

  • Being based in Europe can "work as a little bit of a competitive advantage over U.S. companies," Lawaetz recently told me. LuggageHero has received an "incredible" amount of support from the Danish government, he said, covering 75% of its employees' salaries during the pandemic — and Lawaetz is well aware that American startups can't always say the same.
  • "Usually you always talk about the U.S. companies being the bigger ones and the strongest ones, financial-wise," Lawaetz said. "But it's kind of the opposite world right now."

It's not like things are perfect over in Europe, though. LuggageHero's revenue has evaporated, with a dearth of travelers looking to use its platform to find luggage storage.

  • "We would be able to survive until next year with zero revenue," Lawaetz told me, though if travel doesn't bounce back by the end of the year, "I would scratch my head and see what else we could do."

Part of the reason for his optimism is the company's recent crowdfunding round, which raised almost $450,000.

  • Lawaetz views crowdfunding as a complement, not a replacement, to venture capital. "Crowdfunding was just kind of a growth hack," he said, saying investors around the world have helped the company launch in new cities.
  • As for what's in it for them? Not only is there a potential financial reward, there's also a feeling of "being in on the journey," Lawaetz thinks, saying that crowdfunding investors seem much more connected to their investments than traditional stock-market investors.

In a weird way, LuggageHero also might have benefited from lockdown.

  • Crowdfunders "wanted to travel," Lawaetz said. "And I think the closest they could get to traveling was investing in a travel company."

Closing Bell

Police-tech stocks are all over the place

Police-tech stocks soared Monday amid expectations that civil unrest might make the police need more body cams and communications equipment. But those same stocks fell quite dramatically throughout Tuesday. That could mean any number of things. Perhaps investors think normality will return sooner than they did, or maybe they're betting that the police will see some of their funding disappear. Or the professionals might just be selling off after a wave of unexpected interest from retail investors pushed prices well above any semblance of normality. Gun stocks, for what it's worth, are still up. Stay safe, everyone.

Thoughts/feedback/tips? Email me — shakeel@protocol.com — or anonymously contact Protocol. And subscribe to get Index in your inbox each morning. Thanks for reading, see you tomorrow.

Recent Issues