Karaniya Dharmasaputra: The Power of Digital in Democratizing Investment Access for All

This article is part of DailySocial Mastermind Series featuring innovators and leaders in the Indonesian technology industry to share stories and perspectives.

Karaniya Dharmasaputra is the Co-Founder and CEO of Bareksa, the first integrated online mutual fund marketplace in Indonesia. Currently, he also serves as President of OVO, one of the accepted payment platforms in both O2O retail stores and e-commerce platforms.

Prior to entering the financial technology industry, Karaniya had held various positions in well-known media companies. Some of them are KOMPAS TV, KapanLagi Youniverse. Liputan6.com, The Jakarta Post, VIVA, and TEMPO.

His dedication to journalism has earned him a Master's degree in Public Policy through the Fullbright scholarship program at George Washington University, Washington DC, United States. It was here that he had an eye-opening experience with the digital industry. He believes the power of digital can democratize access for all.

The DailySocial team had a fairly in-depth discussion with him, and the following is his explanation.

Currently, you serve as Co-founder and CEO of Bareksa, as well as President of OVO. What are the challenges faced while holding two positions?

Currently, I feel like my life is driven by the calendar, this is like a competition that occurs in my schedule. Don't want to sound too busy, but it's part of the job. Fortunately, Ovo and Bareksa have the same vision and quite strong synergy. Therefore, these businesses are not completely separate and we also cross paths a lot along the way. Last year, Ovo also invested in Bareksa and since then, our synergy has become stronger. Recently, OVO has also expanded into financial and investment services, with more to come.

How did your business journey begin? From media companies to financial technology

Since middle school, I have had quite a different hobby, reading news from daily newspapers, magazines and television. My dream at that time was to become an architect or journalist. I was finally accepted into the communications department at Gadjah Mada University (UGM). Some time I took the time to be present in the activist movement, just to gain more critical experience as a student.

I started my career as a graphic designer and illustrator. At the same time, I also took an interest in public affairs. Don't mean to come off as particularly idealistic, but I've always thought that life isn't just about making money. Having added value in life, gaining experience, and being useful to others is also worth fighting for. My first experience in a media company was when I interviewed with Tempo and became a political and business journalist.

Another journey began when the US Embassy offered me a Fullbright scholarship. I never thought about continuing my studies, until I was able to complete a master's degree in public policy from George Washington University. This became the turning point of my life.

If it can be categorized, there are three digital waves occurring in Indonesia. First, it hits our media industry. Then, the rise of e-commerce. Lastly, this happened in financial technology. I was sent to the US in 2004, the first wave had already begun to spread in the media industry. At that time, there was no multimedia journalism.

My first digital experience in the US was quite astonishing. I don't come from a noble family, my scholarship is just barely enough to cover my expenses with a wife and three children. Every day, I watch the news, and am amazed at how the digital world can change and remove any limitations of conventional media.

One day, I saw a scandal told in a very comprehensive way where you could dig deep using multimedia and hyperlink. Everything is connected and very interactive. This is the real power of the digital world. Not to mention the role of e-bay and amazon which really help me save money. All were eye-opening experiences for me. Then, I decided to dive into the digital world.

Returning to Indonesia, everything is different again. I recommended digital solutions to my company at that time, but they rejected the offer asking me to focus more on the core business only. That's when I realized that it was time to start building a digital business. I looked for investors and created Viva.co.id. We focus on educating Indonesian people with digital services, e-commerce, and others. At that time, Bukalapak and Tokopedia were probably still in their early stages.

Bareksa co-founder Karaniya Dharmasaputra with Ovo CEO Jason Thompson at the launch of the company / Bareksa synergy

Six years ago, what prompted you to form Bareksa and enter the financial technology space?

In terms of deeds, Bareksa was founded in 2013. We started with a very small team in conceptualizing the business plan. The platform, which was launched in 2015, is more like an information and data space. In 2014-2015, technology companies were not allowed to sell mutual funds and investment products, we had to collaborate with securities companies.

In my journey as a “media person”, I have covered several financial and investment business news. I always see our [Indonesian] financial world as very elitist. Public access is not available or quite difficult. I started investing but in conventional ways, it can be a time consuming user experience. Fintech wasn't even born then. However, I strongly believe in the digital wave that will soon arrive in the financial sector. With several connections in the financing business and experience building digital companies, Bareksa became the first fintech licensed by the OJK as an online sales agent in 2016.

I explained the problems in our mutual fund industry, low penetration in terms of supply and demand. Many local asset management companies have difficulty finding distribution channels because they still depend on banks. In terms of demand, penetration is quite low. Rather than saying not to save in banks, we would like to introduce that there is another safe and stable investment instrument that is very popular in other countries called mutual funds. The problem is, our people don't understand and don't have access. This is why I started Bareksa.

In situations like this, many startups experience severe shocks and even close their businesses. How does this issue impact the financial technology industry?

Speaking as President of OVO, I think this pandemic shows that the digital economy driven by financial technology will grow exponentially. Especially with the shift in consumer behavior to digital, not only in e-commerce but also in the fintech sector. Based on OVO data alone, transactions in e-commerce jumped around 110% -120%, food delivery 15% -20%. Additionally, demand for online merchant loans increased by nearly 50%.

When the government declared the Covid-19 pandemic a national disaster, I felt very devastated. I thought, who wants to invest when the economy is down. However, I discovered something interesting while watching the numbers go by. When ICI fell 38%, Bareksa's AUM only fell 12%. Additionally, the number of transactions and new users continues to increase. In just 3-4 weeks after the announcement of the pandemic, we were there rebound. This points to the fact that online investments driven by financial technology are becoming increasingly resilient.

Regarding the challenges in this industry, are there any experiences you can share from your time in business?

I have always admired the persistent, strong-willed young people among us in the technology industry. The first to third years of building a business are the most challenging. I was frustrated for a long time too, times like these, it's important not to lose hope. Apart from emotional matters, it is very important to start a new business by determining the right business model. In the end, we must be humble to let go of ego and open up opportunities for collaboration.

You are listed as one of the top officials of the AFTECH association, can you tell us about your and the association's role in contributing to developing the financial technology sector in Indonesia?

Fintech is an industry that is full of regulations and the ecosystem is very important. Meanwhile, our financial regulations are still driven by the conventional financial industry. Meanwhile, regulations will affect the growth of the fintech industry. Therefore, we think it is important to form this association so that it can take collective action to collaborate with the government. Thus, we can have a financial ecosystem that is compatible for our financial technology demands.

Documentation by Bareksa

What is your biggest ambition right now? Have you ever thought about starting something new in this WFH situation?

For now, my vessel is quite full with OVO and Bareksa. There's still a lot in our pipeline. After all, we are in the middle of integration. There is still a lot of room for synergy. If there is an opportunity, I really hope to realize the Indonesian version of the iron triangle synergy in our technology industry.

What is your perspective regarding the "new normal" era and its impact on the entire ecosystem?

Actually, the pattern is starting to appear. There will be many sectors that rely heavily on digital technology. I see digital adoption has become a key factor, not only to survive but also to thrive. I think this is why I am so passionate about working in the digital industry. I see great power in digital that can be useful for governments to democratize our economy. Currently, SMEs can have the same opportunity to market their products together with other large players. They can compete at the same level. This is an amazing transformation. How digital companies provide equal access for everyone, not just the big players. I think that's the whole point of digitalization.

-This article was written in English, translated by Kristin Siagian