Venture Capital Association Responses to the News about the Merge

Financial technology company (fintech) payment OVO and DANA reportedly agreed to merge. This news blows after its competitor, GoPay made by Gojek, received funding from Facebook and PayPal.

Only, DANA CEO Vincent Iswara was reluctant to comment on the issue. Likewise with OVO. “We do not comment on rumors circulating in the industry,” said OVO Head of Public Relations Sinta Setyaningsih. The news about the agreement to merge between DANA and OVO was first reported by Bloomberg.

“They aim to reduce the ‘burn money’,” said a source who knows the information, quoted from Bloomberg, last weekend (12/6).

The source also said that the signing of the agreement between the two companies was delayed due to the Corona pandemic. Therefore, the terms and times may change, including related to the agreement.

If the Two Companies Merge, the Business will Get Stronger

Even so, Chairman of the Venture Capital Association for Startup Indonesia (Amvesindo) Jefri R Sirait rate, if OVO and DANA merges, the company’s business will be stronger. “It also strengthens market share and synergy,” he said.

DANA users reach 40 million today. During the Covid-19 pandemic, transactions grew by 15%, primarily for credit purchases, online shopping, and bill payments. However, offline transactions fell by 15%.

While the number of new OVO users increased almost fourfold or 267% during the coronavirus pandemic. Payments for e-commerce and loan disbursements soared. In detail, payments for e-commerce grew 110%, loans 50%, and food delivery 15%.

As is known, OVO cooperates with Grab regarding payment services. The OVO application has been downloaded more than 115 million times as of the end of last year. This payment fintech company has also hooked around 500 thousand sales partners in 354 Indonesian cities.

While LinkAja has more than 40 million users as of the end of March. In addition, there are more than 500 thousand merchant partners who use payment services made by this State-Owned Enterprise (BUMN).

On one hand, Gojek has more than 170 million users in Southeast Asia. About 50% of transactions on the Gojek platform use the GoPay service. In addition, more than half a million sales partners accept GoPay payment services.

In fact, 100 thousand MSMEs joined the Gojek ecosystem in three months amid the Covid-19 pandemic. In fact, before the company took two years to hook 500 thousand MSMEs. Jefri assessed that if OVO and DANA were to merge, the acceleration of digitization of payment services in the country would be even faster.

The News of the Merge has been Heard Since 2019

Actually, news about the merge between OVO and DANA has been blowing since last year. Lippo Group founder and owner Mochtar Riady said his company sold two-thirds of OVO shares. From the information circulating, OVO will sell shares to PT Elang Mahkota Teknologi Tbk (EMTK) who is also the owner of DANA digital wallet shares.

At that time, OVO President Director Karaniya Dharmasaputra said that talks with various other companies continued. However, he was reluctant to comment further on the news of the merge.

“It’s still a rumor. I don’t think there is any certainty about the rumor. It is really just a rumor,” Karaniya said on the sidelines of the Indonesia Digital Conference 2019, in Jakarta, November last year (28/11).

For information, OVO, Dana, and GoPay are the three big players in the fintech market in Indonesia. All three are supported by foreign investors who also have great reputations.

OVO is part of Softbank Group which is also supported by Grab Holdings Inc. DANA is supported by affiliates from Alibaba Group Holding Ltd. While GoPay, which is part of Gojek is capitalized by a number of large investors ranging from the Djarum Group, PayPal, to Facebook Inc.

If completed, that is, this merge agreement will also help Grab to compete with Gojek in Indonesia, especially in digital payment services.