Lippo Group founder Mochtar Riady said the company sold over 70 percent of its stake in digital financial services firm Visionet International (OVO), citing its high level of spending.
“We’re not letting go of our stake. We’re merely selling two thirds of it. We’re retaining the remaining 30 percent of our stake,” Mochtar said on the sidelines of the 2019 Indonesia Digital Conference, organized by the Indonesian Cyber Media Association (AMSI) in Jakarta on Thursday, as quoted by kompas.com.
He said the company’s spending was the reason for the divestment.
“We keep burning money. How are we supposed to be strong?” he said.
Earlier this year, rumors circulated that Lippo Group would sell its stake in OVO as the company could no longer inject more funds into the fintech firm. Lippo Group was paying Rp 700 billion ($US 50 million) to OVO per month.
However, OVO president director Karaniya Dharmasaputra denied the rumors of a complete divestiture, saying that OVO was originally founded and developed by Lippo Group.
He said he had discussed the future of OVO with Lippo Group director John Riady.
Digital payment is the most popular type of financial technology (fintech) service for Indonesians, followed by investment and pay-later services, a study has found. The public's awareness of peer-to-peer (P2P) lending remains low.
A report titled Fintech Report 2019 published on Tuesday found that 82.7 percent of Indonesians were aware of digital wallet platforms, while 62.4 were aware of digital investment and 56.7 percent of pay-later services.
The study, which involved 1,500 respondents nationwide, also found that GoPay outperformed OVO in terms of digital payment use, although awareness of OVO was higher than that of GoPay.
Mochtar said that understanding the rapid pace of technological development was the key to survival in the industry. He predicted artificial intelligence would be the logical continuation of digital technology in the near future.
“Digital technology is not new. It began its life in 1946, so it’s now 74 years old. Digital technology will soon be replaced by AI, where everything is done by robots,” added Mochtar. (rfa)