GRAB is leading a Series B round of up to US$100 million in commitments into Indonesia's state-backed e-wallet LinkAja, the companies announced in a statement on Tuesday.
This marks LinkAja's first external investment from a private company, as well as a new twist in the long-running e-wallet war between rivals Grab and Gojek.
LinkAja's Series B round is joined by three Indonesian heavyweights: domestic telco Telkomsel, BRI Ventures, the venture arm of state bank BRI, and Mandiri Capital Indonesia. Grab is a minority investor.
Neneng Goenadi, managing director of Grab Indonesia, said: "We chose to invest in LinkAja because we believe that together, we can help accelerate our shared goal of improving financial inclusion in Indonesia."
Grab is already a key investor and strategic partner of Ovo, one of the biggest e-wallet operators in Indonesia. Unlike Gojek, Grab does not operate an e-wallet directly in Indonesia. It instead has integrated Ovo for payments on its Indonesian app.
Ms Goenadi added that Grab's collaboration with LinkAja will involve Ovo and Indonesian e-commerce platform Tokopedia, another close collaborator of the Singapore-headquartered firm.
LinkAja was formed last year through a merger of e-wallets of Indonesian state-owned enterprises (SOEs) Telkomsel, Bank Mandiri, BRI and BNI. Other shareholders include financial services firm Danareksa, oil-and-gas firm Pertamina and insurer Jiwasraya.
The e-wallet, which started operations in June 2019, claims to have more than 58 million registered users, with over 80 per cent from Indonesia's Tier 2 and 3 cities.
In April, LinkAja launched Layanan Syariah LinkAja, the first sharia e-money service that has received a Sharia Conformity certification licence from the National Sharia Council of the Indonesian Ulema Council (MUI) and Bank Indonesia. It claims to have garnered over a million registered users within six months of its launch.
In the statement, the firms said that LinkAja's fund raise - amid a pandemic - bears testament to the confidence in specific aspects of its business model, such as its shareholder base of SOEs, wide distribution network and product offerings.
LinkAja said that it grew its Gross Transaction Value and the number of transactions in Q3 this year by three times, compared with the same period last year.
Haryati Lawidjaja, chief executive of LinkAja, said: "We believe that the strategic cooperation supported by Grab's investment and technology expertise will strengthen LinkAja's services in giving effective solutions to provide access to finance and economy for Indonesians."
She added that the Series B round "is a vote of confidence for our business model and achievements ... We continue to welcome new investors and partners from various sectors to be a part of LinkAja's mission in realising our big goals of encouraging financial and economic inclusion, as well as accelerating Indonesia's national economic growth."