Lippo sold two-thirds OVO stake due to cash burn, says founder Mochtar Riady

Photo: Ovo

Indonesia’s real estate major Lippo Group sold about two-thirds stake in payments platform OVO due to the unsustainable cash burn required by the business, the conglomerate’s founder Mochtar Riady said on Thursday.

OVO, which was founded in 2017 as a product of Lippo Group’s venture builder, has received investments from SoftBank-backed Grab and e-commerce unicorn Tokopedia, also a SoftBank portfolio company.

“If we keep burning cash, we are not going to be ‘strong enough’…” he told the audience at Indonesia Digital Conference in Jakarta, according to local media reports.

According to a CNBC Indonesia report, Riady said Lippo continues to be OVO’s controlling shareholder and owns around 30 per cent of the company.

DealStreetAsia reached out to OVO for comment but had not received a response at the time of publishing.

Earlier this week, we reported that a merger between OVO and local rival PT Espay Debit Indonesia, better known as DANA, could finalize as soon as the first quarter next year.

News of a potential merger between the two Indonesian firms first surfaced in September with a Reuters report suggesting that Grab was pushing for the deal, which will see it buying a majority interest in DANA and merging it with OVO.

DANA is backed by Alibaba affiliate Ant Financial and Indonesian media conglomerate PT Elang Mahkota Teknologi (Emtek Group). What complicates the discussion with OVO is that Ant Financial is in the process of increasing its stake in DANA to become a majority owner.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.