PT Tokopedia's mascot Toped sits on display in the reception area at the company's offices in Jakarta, Indonesia, on Friday, Feb. 19, 2016.

Photographer: Dimas Ardian

Photographer: Dimas Ardian

Google and Temasek Holdings Pte have agreed to invest about $350 million in PT Tokopedia, people familiar with the matter said, a major cash infusion that will bankroll the Indonesian online malls post-Covid-19 expansion.

The Alphabet Inc. unit and Singapores state investment firm could sign an agreement for the funding soon, the people said, asking not to be identified discussing the deal before its formally concluded. The financing falls short of the initial goal of between $500 million to $1 billion that Bloomberg News reported in July, though Tokopedia may still be looking for more investors.

Tokopedia, the online marketplace backed by SoftBank Group Corp., was said to have held talks with U.S. internet giants including Facebook Inc., Microsoft Corp. and Amazon.com Inc. The backing of Google and Temasek is a vote of confidence for one of Indonesias biggest e-commerce operators, which rode a surge in online shopping during the pandemic.

Americas largest internet corporations have looked increasingly toward Asia as growth in the U.S. and Europe slows, seeking to tap the regions rapidly growing smartphone-savvy population. Facebook is buying a stake in Indias Jio Platforms, while its WhatsApp unit struck a deal to invest in Gojek, which has a popular digital payments service called GoPay. Representatives for Google, Tokopedia and Temasek declined to comment.

Tokopedia co-founder and Chief Executive Officer William Tanuwijaya built Indonesias most valuable startup after Gojek by scoring early backing from SoftBank founder Masayoshi Son and Alibaba Group Holding Ltd. co-founder Jack Ma.

E-commerce platforms like Tokopedia, Alibabas Lazada Group SA and Singapore-based Shopee -- a unit of Sea Ltd. -- moved quickly to serve the millions of people forced to make their first online purchases during widespread lockdowns. Indonesia has become a key battleground between the regional rivals: The countrys e-commerce market is projected to expand from $21 billion in 2019 to $82 billion by 2025, according to a recent study by Google, Temasek and Bain & Co.

Indonesia is the biggest contributor to the internet economy's growth in the region

Source: Google & Temasek / Bain, e-Conomy SEA 2019

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Google, Temasek Agree to Invest $350 Million in Tokopedia - Bloomberg