Lazada-backed Dana finds new momentum as it looks beyond payments

Has Indonesian digital wallet Dana – fresh off a fundraise from local conglomerate Sinar Mas Group and Alibaba’s Lazada – found new life?

It has been five years since the company last raised a funding round and two since the Ovo-Dana merger rumors first came about (though it ultimately didn’t pan out).

Photo credit: Dana

Through the years, Dana – backed by Ant Financial since its early days – held a niche in the Indonesian e-wallet space but lagged behind competitors like GoPay.

But that may soon change. Dana co-founder and CEO Vince Iswara tells Tech in Asia that transaction values have increased 200% from the previous year. The e-wallet now has 120 million users, and it sees over 10 million transactions a day.

Meanwhile, third-party estimates show that Dana has edged Ovo in terms of monthly active users (MAUs) in the first half of 2022. (Numbers for GoPay and ShopeePay are unavailable as they are not standalone apps.)

With digital payments in Indonesia a red ocean by this point, however, the playbook for Dana’s future is a familiar one: financial services.

Next phase of growth

Iswara explains that the firm will use the new funds to improve its tech and launch new financial products such as lending, insurance, and wealth management.

These services will target micro businesses as well as the unbanked and underbanked population in its home country. According to Bank Indonesia data in 2019, there were 92 million people in the country who were still unbanked and 47 million who were considered underbanked.

But other fintech startups also offer products catered to the same market. Thus, Dana’s advantage will come from its integrations with Sinar Mas Group and Lazada.

“Dana is an open platform. With our investors, we can accelerate everything. They have many business entities that we can work with as well,” says Iswara.

Alibaba has heightened its focus on Lazada in recent months, including an almost US$1 billion injection in fresh funds. The Southeast Asian ecommerce platform has also made moves into the fintech space. It would make sense for Lazada and Dana, both of whom are part of the Alibaba ecosystem, to collaborate more closely.

Fierce ecosystem war