DANA Announces Investment from Sinar Mas and Lazada Group, Supports Open Ecosystem Platform [UPDATED]

DANA announced that it has completed the latest investment transaction from Sinar Mas and Lazada Group with an undisclosed amount. The proceeds will be used to accelerate the company's mission to become an open ecosystem platform to support the rapid digitalization in Indonesia.

Based on a disclosure on the Indonesia Stock Exchange today (11/8), PT Sinar Mas Multiartha Tbk (SMMA), the Sinar Mas Group's financial unit, has invested $25 million into DANA. Further confirmed by DANA management, there are three subsidiaries under the Sinar Mas Group participating in this latest round for a total of $250 million (over 3,6 trillion Rupiah). One of them is from SMA. Meanwhile, the number of injections from Lazada is not mentioned.

"The total fund is $250 million from the three entities under Sinar Mas, one of which is SMMA, which is worth $25 million," said a representative of DANA when contacted. DailySocial.id.

After this funding round, according to the list CB Insights, DANA entered the ranks of unicorn startups with a valuation of over $1 billion. In the list, DANA is entered as 9th unicorn startup, following other local companies such as Traveloka, Kopi Kenangan, Xendit, OVO, and Ajaib.

When asked for further confirmation by DailySocial.id on Thursday (18/8), DANA Indonesia Co-founder and CEO Vince Iswara simply said, "We don't really comment on our valuation. We pingin put more focus on How strong indonesian tech companies are and confidence from very reputable investors are high!."

In an official statement delivered on Wednesday (10/8), Vince Iswara expressed his pride at the joining of Sinar Mas and Lazada Group as shareholders of DANA, along with its former supporters, namely EMTEK Group and Ant Group. He believes the DANA platform will provide a lot of strategic value to investors.

“The support provided by all shareholders will certainly strengthen DANA, as we continue to improve the digital financial services that DANA provides to all Indonesians and in accelerating financial literacy and inclusion to encourage national economic growth. We also believe this investment is part of business development that will prepare DANA for the next growth phase,” he said.

Previously, investment from Sinar Mas carried out through PT Dian Swastika Sentosa Tbk (DSSA), which entered through its subsidiary PT DSST Dana Gemilang (DSST), amounting to Rp2,8 trillion in February 2022. This move makes DSST one of the majority shareholders in DANA after PT Elang Andalan Nusantara, a joint venture established by PT Kreatif Media Karya (KMK) and Alibaba through API Investment Ltd.

DSSA Chairman Franky Oesman Widjaja said that his investment in Dana marked the start of a sustainable strategic collaboration between Sinar Mas and DANA. “The collaboration between DANA and various Sinar Mas business lines will ultimately drive digital acceleration in Indonesia. We are looking forward to collaborating with DANA to have a positive impact on business digitization in Indonesia [..],” said Franky.

Lazada Group and Lazada Indonesia CEO James Dong added, "With the digital landscape that continues to grow in Indonesia and Southeast Asia, increasing access to financial services and providing wider payment options for businesses and consumers is a very important development.

“Although Lazada remains focused on e-commerce, We see Lazada as playing an important role in building the technology, logistics and payment infrastructure that will benefit Southeast Asia in the long term. Our investment in DANA is a strategic step in the right direction,” said Dong.

Vince said that his party remains actively involved and opens up investment opportunities, as well as partnerships for selected potential investors who have confidence in DANA's vision and mission to accelerate financial literacy and inclusion in Indonesia.

In realizing its ambition to become an open ecosystem platform, DANA has confirmed itself to be involved as a first mover in the National Open API Working Group in order to implement Payments Open API National Standard (SNAP).

The DANA Payment Open API product successfully obtained approval from Bank Indonesia at the end of June 2022. In working groups the 14 joint FUND first mover others, consisting of banking, e-commerce, and other payment service providers (PJP).

For the record, standardization through SNAP is part of the Blue Print for the Indonesia Payment System 2025 compiled by Bank Indonesia. This is a national standard for uniform languages, protocols, instructions, and others that facilitate interconnection between applications, in order to encourage the acceleration of payment system players in conducting digital cooperation as well as reducing consumer transaction costs.

The presence of SNAP is also able to encourage integration, interconnection, and interoperability, thereby increasing efficiency as well as interlinkage between bank PJPs and non-bank PJPs, as well as other digital actors.

DANA Achievements

DANA's move to enter the open ecosystem platform is supported by the condition that there are more than 43% of the population unbanked in Indonesia. Therefore, digital payments are the main gateway to get access to financial services.

Based on Bank Indonesia data, digital payments have surpassed credit and debit card transactions as a means of payment, especially in terms of transaction volume, with a value reaching more than 16 billion transactions in 2021. Meanwhile, in terms of transaction value, digital payments have significantly exceeded credit cards by IDR 786 trillion in the same period.

"We are committed to continuing to be an open ecosystem platform in the provision of lifestyle-based payment solutions and financial services because it is necessary to achieve more massive financial inclusion."

Vince also believes that through this open strategy, DANA is targeted to more than double in terms of total payment volume or gross transaction value this year.

It is claimed that DANA currently has more than 115 million users and processes an average of more than 10 million transactions daily. The DANA application itself, citing data.ai (formerly AppAnnie), was ranked first as the most downloaded application in the Finance category in Indonesia in 2021.

DANA technology is said to facilitate the process independent for the merchant from any scale of business, in less than an hour. They can immediately accept various types of payment instruments, just like merchant big in Indonesia.

In addition, DANA also offers an easy-to-use merchant platform and the ability to complete payments in real-time. Now DANA has been received by more than 18 million merchants who are members of the national QRIS network.

Digital payment platform competition

Menurut Fintech Report 2021 published by DSInnovate, platform e-money fintech (server-based) is the most popular service in Indonesia. No doubt, because this service is currently the main payment infrastructure in various digital applications for consumers. On the other hand, innovation also continues to be intensified, including by venturing into the offline merchants take advantage of QRIS capabilities.

The report also reveals the results of a survey of 1500 respondents using the platform e-money, it was found that DANA ranked third in terms of the number of users and total awareness.