OVO Revealed the Main Challenges of Indonesian Startups

Nowadays, the concept of “startup” or a technology-based pioneering company is becoming a hot topic in various industries. How come? The reason is that startups have taken a leading role in bringing disruption to the economy both nationally and globally.

It can be seen from OVO, one of the startup companies in digital wallet applications that has become a unicorn company. The startup comes with a valuation of more than USD 1 billion and becomes the fifth in Indonesia in only two years.

Seeing the current condition of the startup industry in Indonesia, OVO CEO, Jason Thompson assessed that one of the biggest challenges for startup companies today is how the company can attract foreign investment to help build the startup to grow bigger faster.

“One of the biggest challenges experienced by Indonesia is how to attract foreign investment to Indonesian startup companies. We must try to project Indonesia as a very good country for investment,” Jason said in Jakarta recently. But, Jason is optimistic about the future of the financial technology (fin-tech) industry.

OVO CEO: Jakarta Is the Center for Global Fin-tech

Despite the challenges, Jason dares to declare Jakarta as the ‘Center for Global Fin-tech’. “China has passed, India is still far behind, and fin-tech in the European and North American markets does not have a big impact. Therefore, Indonesia will become a battleground for the fin-tech industry,” Jason explained.

However, to fulfill this potential, Jason emphasized that Indonesia, both from the government and industry players, needed to work hard as a collective to attract the right investment. In this case, the investment should be more sustainable and is not directed to profit growth quickly.

Jason further assessed that investment in infrastructure, education, and new processes is needed for customer service. Thus, it is hoped that investment and synergy in the industry will help push the Indonesian economy into the 5 biggest economies in the world.

“We all must play our respective roles to advance Indonesia to become one of the 5 biggest economies in the world,” he said. Recently, money-burning action has become a huge topic among startup industries. It becomes something that every startup player learns.

Regarding the money-burning issue, OVO was rumored to be left by its main investor because of this strategy. Lippo Group, one of the main investors of OVO, was reported to leave from this digital wallet service. It is said that the Lippo Group leaves due to money-burning action.

OVO and Its Money-Burning Action

Lippo Group intends to leave because it is not strong enough to supply funds to support the money-burning action with free services, discounts, and cashback. In the last two years, OVO has called aggressive when it comes to burning investors’ money.

“Lippo Group plans to revoke from OVO. Each month OVO spends USD 50 million.” OVO itself is a digital wallet owned by PT Visionet International. Lippo Group is a major shareholder of the company. OVO was originally an application to manage shopping reward points on the Lippo Group’s retail network.

In 2017, OVO obtained an e-wallet license and actively held discount and cashback promotions to capture users. Even OVO is now referred to as a serious challenger to GoPay in the electronic money market. However, the issue of leaving the group was directly denied by Lippo.

This information was also denied by OVO President, Karaniya Dharmasaputra. According to him, in the beginning, OVO was founded, pioneered, and developed by the Lippo Group. At present, OVO shareholders are very diverse. OVO is currently an independent company managed by professional management.

“Regarding the rumors, I just met and had a long chat with Mr. John Riady about the future of OVO. He gave a lot of input and so far has been very supportive of various OVO business development efforts,” he concluded.