Lippo Group has been paying Ovo $50m each month, says local media

Ovo, the leading e-wallet in Indonesia by market share, has been getting US$50 million a month from major shareholder Lippo Group, The Jakarta Post reported.

Lippo had been said to be offloading its Ovo stake as it could no longer fund the fintech venture, it continued. Ovo has denied those claims. “We deeply regret the circulation of these false rumors,” said Adrian Suherman, president director of Ovo’s parent firm PT Multipolar Tbk, although he did not appear to have specified how much money the company is losing.

Nonetheless, Lippo founder Mochtar Riady has confirmed that his group has sold over 70% of its stake in Ovo and is keeping the rest, citing the company’s spending as the reason for the divestment. “We keep burning money. How are we supposed to be strong?” local media quoted him as saying.

Photo credit: KrAsia

Ovo and rival Indonesian payment firm Dana have reportedly been in talks to merge. Grab was said to be discussing the purchase of a majority stake in Ant Financial-backed Dana before merging it with Ovo.

While Ovo has been the top e-wallet in Indonesia, it’s unclear how much money it had spent to get to that position, and whether the spending is sustainable.

Ovo started out as an internal project at Lippo and found its first successful use case as a payment app for parking spots in the properties managed or owned by the conglomerate.

The project is being led by Lippo’s 33-year-old heir apparent John Riady, who put up Ovo after the group’s failed ecommerce venture, MatahariMall.

Ovo could not immediately respond to Tech in Asia’s request for comment.