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.