Gojek, the Indonesia ride-hailing and payments company, is merging with marketplace Tokopedia to form a multibillion-dollar technology company called GoTo Group, Reuters reported Tuesday.

Gojek said the agreement was the biggest business consolidation in Indonesia, adding to increasing competition in Southeast Asia that is attracting billions of dollars from investors.

The combined entity will span online shopping, ride-hailing, courier services, food delivery and other services.

It is "a globally unique and highly complementary ecosystem," Gojek and Tokopedia - two of the largest startups in Indonesia - said as they look to better compete with heavily funded app Grab and e-commerce platform Shopee.

Gojek and Tokopedia began their merger talks earlier this year. In April the two companies moved to seek approval from their respective investors. During their talks, investors proposed a valuation of $18 billion for GoTo. 

Nadiem Makarim, Gojek's founder, is now Indonesia's minister of education and culture. The newly combined company GoTo is backed by investors including Alibaba, Tencent, BackRock and Temasek Holdings.

The companies, which have together raised about $8.2 billion over the years (based on figures by research group Tracxn), did not comment on the final valuation Monday nor did they disclose any other financial terms of the deal, TechCrunch said.

"It's a union of equals. We're creating probably the first platform in the world that combines very distinctive platforms - e-commerce, on-demand and financial services - into one larger ecosystem," Bloomberg quoted Gojek co-chief executive officer Andre Soelistyo as saying during a media conference via Zoom.

GoTo will pursue a listing by the end of this year, with an objective of having its shares traded in both Jakarta and the U.S., Tokopedia President Patrick Cao said, according to Bloomberg.

Two sources with knowledge of the matter said GoTo was seeking a pre-initial public offering funding that could enable the company to raise about $2 billion followed by public market floats with a potential valuation of around $40 billion, Reuters said.