Indonesian FinTech LinkAja closed a series B funding round led by Singapore super app Grab, with participation from Telkomsel, BRI Ventura Investama and Mandiri Capital Indonesia.
“We are very enthusiastic about joining Grab as one of our shareholders. We are sure that this strategic partnership supported by investment and the power of Grab’s technology will strengthen LinkAja’s services in providing effective solutions to provide access to finance and the economy for the Indonesian people,” Haryati Lawidjaja, president director of LinkAja said in a statement on Tuesday (Nov. 10), per IBS Intelligence.
The funding “is a form of trust in the business model and the initial achievements that LinkAja has achieved in one year” since the company’s founding last year, Lawidjaja added.
The new funding will be used to advance LinkAja’s reach to the middle class and to reach micro, small, and medium enterprises (MSMEs) in Indonesia. LinkAja is the result of an alliance of the top State-Owned Enterprises (BUMN) in Indonesia.
More than 80 percent of the startup’s 58 million-plus registered users come from tier 2 and 3 Indoseian cities.
“Grab, together with the related Ministry of BUMN and BUMN, are committed to helping the growth and development of the startup ecosystem in Indonesia,” said Neneng Goenadi, managing director of Grab Indonesia. “Cash is still the main medium of exchange in Indonesia, and there are millions of Indonesians who are still unreached by the traditional banking system.”
Goenadi added that the investment in LinkAja “accelerates our goal” of advancing financial inclusion in Indonesia. The partnership will enable “a variety of cashless services” for all income levels in the country.
LinkAja is among the only FinTech startups created by BUMN. Over the course of the coronavirus pandemic, the startup said it has experienced three times the growth in gross transaction value and transaction numbers in the third quarter of this year compared with the same period in 2019.
The state-owned eWallet platform launched in Jakarta in July 2019 as more that 90 percent of Indonesia’s 264 million residents started using smartphones. Cashless transactions in the country using digital money is anticipated to increase to 24 percent by 2027.
Grab announced in August that it was planning to start offering consumer loans and wealth management products to the people in Singapore.
By the end of last month, Grab said it was starting to recover and saw revenue rebound to 95 percent of pre-pandemic levels.