(Bloomberg) -- GoTo Group agreed to use to cloud services from Alibaba Group Holding Ltd., which pledged to not sell down its stake in the Indonesian ride-hailing provider any further for the duration of the pact.
The deal could support GoTo’s stock price, which has declined about 80% since its 2022 initial public offering as Alibaba and other major holders reduced their holdings. Early investor Alibaba’s stake has shrunk to about 7.5% from roughly 9% in 2022 as it sold billions of shares.
As part of the five-year deal, GoTo will use Alibaba’s computer infrastructure to help run its services, which span ride-hailing and delivery in Indonesia and Singapore. GoTo and its more than 50 million users represent a win for Alibaba, whose cloud division has struggled to sustain growth in the face of stiff competition both at home and abroad. The companies didn’t disclose the value of the deal, which came in the form of a non-binding memorandum of understanding. GoTo previously signed a cloud deal with Alphabet Inc.’s Google.
Unprofitable GoTo, which vies with Singapore’s Grab Holdings Ltd. in the cut-throat Southeast Asian market, has slashed jobs as user growth cools. It’s exited Vietnam and Thailand and late last year relinquished control of loss-making e-commerce arm Tokopedia to ByteDance Ltd.’s TikTok in a $1.5 billion deal.
Since Patrick Walujo took over as chief executive last year, the company has moved closer to profitability. The company reiterated this month it expects to reach positive adjusted earnings before interest, taxes, depreciation and amortization for the full year.
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