Grab in talks to merge Indonesian payment firms Ovo, Dana, sources say

Southeast Asian ride-hailing titan Grab is in talks to merge Indonesian digital payment firms Ovo and Dana to take on rival Gojek, people familiar with the matter told Reuters.

Discussions are private and still at an early stage, the sources said.

Photo credit: Grab

If an agreement is formed, it would see Grab buying a majority interest in the Ant Financial-backed Dana from Indonesian media conglomerate Elang Mahkota Teknologi (Emtek), then merging it with Ovo, in which it owns shares.

“It’s part of the Grab-Gojek battle,” said one of the sources.

The discussions follow SoftBank’s announcement that it will pour US$2 billion into Indonesia’s digital infrastructure through Grab.

Both the ride-hailer and Ovo declined to comment, while Dana said it does not comment on market rumors. Emtek, Ant Financial, and SoftBank did not immediately respond to requests for comment, according to the report.

According to App Annie and iPrice, Ovo was the second-biggest e-wallet app in Indonesia for Q2 2019 in terms of monthly active users (MAUs). It was followed by Dana, which overtook competitor LinkAja.

The merging of the two firms would pose a threat to Gojek’s GoPay, the e-wallet app that had the most number of MAUs in the country in the same period.

Gojek and Grab have been competing in various areas such as ride-hailing and food delivery. The former, which is on track to raise up to US$2.5 billion in its ongoing series F round, has recently launched a rebrand in an effort to strengthen its position as a super app.

Meanwhile, Grab announced late last year that it secured US$1 billion in fresh funding from Toyota, which is leading its series H round. It also launched a slew of new services this year, including public transport info integration, in-app hotel and ticket-booking features in Singapore, and updates to its GrabPay digital wallet.