Indonesian digital wallet LinkAja announced its corporate action on Wednesday by securing strategic investment from Mitsui & Co., Ltd. (Mitsui).
The investment, which will be the first investment by a global company to LinkAja, is purposed to further strengthen LinkAja’s ecosystem and business strategies, including collaboration with LinkAja’s State-Owned Enterprises (SoE) shareholders, LinkAja said in a statement.
According to the statement, investment in LinkAja is Mitsui’s strategic approach to developing its digital finance business and accelerating strategic collaboration between LinkAja’s ecosystem, mainly in SoE and Mitsui ecosystem in Information & Communication Technology (ICT), retail, or other businesses, to accelerate economic and financial inclusion in Indonesia.
Kartika Wirjoatmodjo (Tiko), Vice Minister of SoE, welcomes the strategic investment from global investor, Mitsui to LinkAja.
He stated that this commitment demonstrates that the business model of LinkAja has a potential market value that global partners may seek.
Meanwhile, Shinichi Kikuchihara, PT Mitsui Indonesia President Director, said that Mitsui has started long-term commitment to Indonesia market since 1901 where the former Mitsui opened an office in Surabaya, and since then together with Indonesia they grow their business.
“In Indonesia, Mitsui operates in strategic sectors such as infrastructure and energy, mobility, steel, chemical food and retail and information and communication technology (ICT),
“Some of Mitsui’s investees in Indonesia include Bussan Auto Finance (Motorcycle retail finance) and convertible bond subscription in CT Corp,” he said.
As society continue to digitalize, he said they are also growing their focus on the value of digital economy, including digital finance in Indonesia.
“As a company with strong business fundamentals and shareholder ecosystem, we believe that Mitsui and LinkAja together can contribute to the development of Indonesian digital finance industry,” he added.
It is noted that through pivoting its business model and cost efficiency strategies, LinkAja has successfully achieved significant improvements in business performance, with positive earnings before interest, taxes, depreciation, and amortization (EBITDA) for two consecutive quarters at the end of 2023.
In 2024, LinkAja continues to focus on synergizing with state-owned enterprises (BUMN). Mitsui’s strategic investment will also provide opportunities for LinkAja and Mitsui to combine their various potentials and unique competitive advantages to contribute to Indonesia’s digital economy.
“LinkAja has shown strong performance amid global tech winter, by strengthening our focus from business to consumer (B2C) to business to business (B2B) and business to business to consumer (B2B2C) mainly in SoE ecosystem,” said Yogi Rizkian Bahar, LinkAja Chief Executive Officer.
For B2B business, he said they have digitalized payment system in our Telkomsel traditional supply chain, which currently contribute about 20 percent to the firm’s revenue.
“As we believe that strategic collaboration is the key in the digital business, we also started our strategic partnership with other partners including global players, Mitsui,” he said.
He also noted that Mitsui has invested in different industries in Indonesia, therefore they have a large and diverse ecosystem.
“We believe that Mitsui strategic investment will be mutually beneficial not only for both parties, but also to the customer, our stakeholders, as well as the development of fintech industry in Indonesia,
“The trust from global investor will additionally bolster investor trust, potentially attracting other investment interest.” he added.
Previously, in February, as part of strengthening its strategic role as a payment platform, LinkAja launched the Loyalty Points Exchange Program within SoE Ecosystem through AKHLAK Point and reinforce its position in disbursement incentive program for several SoEs.
These initiatives stand as a robust commitment to the collaborative synergy between LinkAja and SoEs, aimed at enhancing the digital ecosystem for greater efficiency and effectiveness to provide added value for consumers journey while fostering sustainability for the company.
Mitsui’s strategic investment is expected to accelerate economic and financial inclusion in Indonesia.
Mitsui is a global trading and investment company with a presence in more than 60 countries and a diverse business portfolio covering a wide range of industries.
Mitsui has set three key strategic initiatives for its current Medium-term Management Plan: supporting industries to grow and evolve with stable supplies of resources and materials, providing infrastructure; promoting a global transition to low-carbon and renewable energy; and empowering people to lead healthy lives through the delivery of quality healthcare and access to good nutrition.