Gojek said on Tuesday that it invested in payment platform LinkAja in its ongoing Series B round, to foster collaboration “across complementary market segments.” Since 2019, LinkAja has been a payment option for transportation and ticket reservation on the Gojek app. Now, Gojek’s payment feature will also be available on LinkAja’s services.
Around 80% of LinkAja’s users come from Indonesia’s tier 2 and tier 3 cities, many of which only gained access to financial services through the startup. They can now also profit from Gojek’s ecosystem, that mostly serves consumers in the main cities, as well as retail businesses, especially micro, small, and medium enterprises.
Telkomsel, Bank Mandiri, BNI, BRI, BTN, and Pertamina are some of the SOEs that are backing LinkAja. Unlike other digital payment operators, it chose not to compete directly with Ovo and GoPay, but instead negotiated its way into becoming part of both ecosystems through Grab and Gojek. Grab was leading a funding round as a minority investor in November, making LinkAja the only fintech firm to have both super apps among its investors.
It provides Grab and Gojek easier access to state-owned companies which tend to be closed to outsiders, according to Bhima Yudhistira of the Institute for Development of Economics and Finance. “The investment marks an entry point for Gojek and Grab to reach customers in the SOEs, which is the strength of LinkAja,” he said.
For instance, the state controls the public transport like Kereta Api Indonesia (also an investor in LinkAja), the sole operator of the public railways. LinkAja also partners with Damri, which among other things runs busses within cities and provinces, as well as airport shuttles. “The more Gojek and Grab invest, the greater their chance to tap into the network and financial infrastructure owned by the SOEs,” explained Yudhistira. Companies that can connect to the public sector will have bigger market share, he believes.
Yudhistira doesn’t think that the triangle will create a conflict of interest. “The influence of the investors depends on the value of their investments,” he said. With an increase in their commitment, they will gain more control over LinkAja’s strategic direction.
This might be beneficial for LinkAja’s business and innovation, which has been lagging behind other players. State-run companies are notorious for a bureaucratic approach which makes it difficult to innovate and act quickly.
“The investment is further validation of our growth and progress in our mission to accelerate financial inclusion in Indonesia,” said LinkAja CEO Haryati Lawidjaja in a statement. “Through this partnership, we aim to create a bigger and wider impact on the Indonesian economy.”