Jakarta. Indonesia’s sovereign wealth fund Danantara is in early talks to participate in Grab Holdings’ proposed $7 billion acquisition of GoTo Group, a move that could ease regulatory hurdles and address concerns over foreign control of a national tech champion.

The proposed deal would mark one of Southeast Asia’s biggest tech consolidations if it can navigate Indonesia’s regulatory and political landscape.

People familiar with the matter told Bloomberg that Danantara has opened preliminary discussions with GoTo to acquire a minority stake in the combined entity. The inclusion of a state-backed investor could alleviate political unease about the Singapore-based Grab taking over a major Indonesian digital player.

Grab and GoTo have made progress on structuring the potential merger, but negotiations have slowed amid concerns over regulatory scrutiny. Indonesia’s antitrust agency KPPU warned in May that it would closely examine the transaction to prevent monopolistic practices.

Danantara’s involvement could improve the deal’s chances of passing government review, a critical step for two companies with deep market penetration in Indonesia. However, sources said talks remain in early stages and there is no guarantee of a final agreement. It is also unclear whether Danantara has held direct discussions with Grab.

Grab, which is backed by Uber Technologies, and GoTo have held intermittent merger discussions for years, often stalled by competition concerns. A merger would unite Southeast Asia’s two largest ride-hailing and delivery services, with potential impacts on pricing and employment, particularly in a strained economy.

Sources say some Indonesian officials are wary that the consolidation may lead to job cuts and increased prices for consumers. As a concession, Grab could agree not to reduce local jobs for a certain period post-merger, Bloomberg reported on Friday.

Grab Indonesia had repeatedly dismissed the merger speculation. “These merger speculations are not based on verified information,” said Tirza Munusamy, Chief of Public Affairs, in an official statement on May 15. She stressed the company’s commitment to strengthening local operations and empowering small businesses.

Public debate has also resurfaced over Grab’s foreign ownership. The company responded by focusing on its local presence: 99 percent of its workforce is Indonesian, with only one foreign executive in its leadership team.

GoTo, formed in 2021 through the merger of Gojek and Tokopedia, posted strong earnings in Q1 2025, with a 37 percent increase in net revenue. Grab also reported growth in Q4 2024, booking a net profit of $11 million and a record adjusted EBITDA.