Indonesian fintech startup Ovo expects to breakeven in 2-3 yrs

The Lippo and Grab-backed startup, last valued at about $2.9 billion, is riding Indonesia’s cashless payments wave to bring merchants and financial institutions timely consumer insights. Ovo’s CEO Jason Thompson sees a fresh fundraising drive next year to support growth.

Students using a vending machine on a university campus west of Jakarta are doing more than just buying fizzy pop. By generating a matrix barcode on their smartphones to complete the purchase, they are also sharing their gender, age and shopping habits with one of Indonesia’s largest payments applications, Ovo. 

The vending machine is just one of Ovo’s pilot projects as it looks to deepen its already expansive trove of data, gleaned from consumers using its app to pay for shopping, online transport, food delivery and bills.

The startup analyses and credit scores data for financial institutions and consumer goods companies and these use the insights they receive to hone products and marketing campaigns directed at Indonesians, the world’s fourth-largest population.

“The payments business is a data business,” said Jason Thompson, Ovo’s chief executive in an interview with FinanceAsia at the company's Jakarta headquarters.

And that business is booming -- according to Thompson, two-year-old Ovo will break even within two to three years. 

Merchants increasingly are working with Ovo as its user base expands. It’s already one of the leading e-payment firms in Indonesia. Ovo is Indonesia’s second-most popular app, after Gojek’s payments arm Go-Pay, based on monthly active users from both Google Play Store and iOS,  according to research by mobile data and analytics platform App Annie and consultancy iprice, as of the second quarter ending June.


Ovo’s growth and path to profitability are combining to create a loud buzz among investors. At its latest funding round, they valued Ovo close to $2.9 billion, according to two people familiar with the matter. 

Ovo is cagey about naming its shareholders, but different sources say Indonesian conglomerate Lippo Group, which created the firm as part of its loyalty points drive, remains an owner. Japan’s Tokyo Century Corp has also said that it invested $116 million in 2017.

Singaporean ride-hailing app Grab and Indonesian ecommerce site Tokopedia are known backers too, helping it to gather more data. Grab made a significant investment into the app, according to one of the people familar with the matter. 

Thompson declined to comment on Ovo’s valuation or the identity of the company’s shareholders but he did say that Ovo is likely to reach out to new investors for funds some time next year.


Ovo's Jason Thompson riding Indonesia's e-payments wave


Ovo is part of a growing industry worldwide that helps consumer goods companies pitch products to fickle shoppers by using machine learning to modernise and add rigour to market research. It hopes to make consumer goods companies more responsive to budding trends in Indonesia.

It's 50-strong Big Data team are constantly evolving the app to be more useful for clients. Ovo vending machines will soon also double up as ATMs where consumers can top up their Ovo cards and the company plans to push special promotions to users based on their location.   

An even larger potential stream of business for Ovo is using the data it gathers to provide financial services companies with a way of gauging the creditworthiness of Indonesians. Indonesia has largely been a black box for banks, insurance companies and wealth managers given that the majority of Indonesians don’t have a bank account and work in the informal economy.


Most recently, in June, Ovo linked up with British insurance provider Prudential to develop health and wealth products. Other partners include Indonesia’s largest bank in terms of assets, Bank Mandiri, another Indonesian fintech startup Moka, as well as convenience store chain Alfamart.

The next six months are going to be hectic at Ovo as it grows its lending book, launches savings products and insurance services.

“As Indonesia grows and more Indonesians start banking, we can grow with the country to become an access point for financial institutions,” said 50-year-old Thompson, who transferred from heading Grab’s payments arm Grab-Pay to Ovo in April 2018.

With assistance from Elizabeth Utley

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