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Fintech M&A in Indonesia

The fintech sector in Indonesia continues to grow, and the term “fintech” now covers a broader range of activities than simply peer-to-peer (P2P) lending platforms. 

Although the COVID-19 outbreak is beginning to create significant challenges for M&A transactions in some areas (see our March 2020 briefing on the possible impact of the COVID-19 outbreak on M&A), we have been seeing an uptake in the adoption of digital financial solutions such as e-payment and online lending. While the outbreak may create new and unexpected M&A opportunities, we also expect to see more M&A activities in the fintech space in the longer term. In this article, we identify some major trends in M&A activities that we have been seeing in the Indonesian fintech sector, particularly prior to the COVID-19 outbreak.

Not surprisingly, the players in Indonesia’s evolving fintech sector are now very varied, ranging from traditional financial institutions (FIs) such as banks, insurance companies, and multi-finance companies, e-money and other payment companies, to P2P lending platforms, data analytics companies, and digital and e-commerce platforms. Numerous forms of collaboration have been shaped and implemented amongst this diverse group of participants.

Undoubtedly, COVID-19 will have a significant impact on the fintech landscape. We are watching developments closely, and will share our insights in the weeks and months ahead. If you have any questions, do get in touch with your usual contacts at HBT.


A recent trend in fundraising that is preferred by some investors and target companies is to couple a small equity investment with contractual collaboration.

The rationale for coupling contractual collaboration with equity investment is mainly to create more synergy between the investors and target companies. The equity investment is expected to incentivise both sides to make the collaboration work more effectively. Even if commencing collaboration is not possible at the time of investment, there are contractual mechanisms that could be explored to preserve the right to enter into such collaboration once the equity investment is in place.

This trend is most apparent in the range of strategic investments being made by traditional FIs into digital or e-commerce platforms. However, another noteworthy (and public) example is Gojek’s recent investment in Bluebird, Indonesia’s biggest taxi fleet – which has been Gojek’s transportation partner since 2017.


Traditional FIs are becoming more active in the fintech sector, responding to the disruption caused by increased competition from start-ups. While some traditional FIs have created separate divisions to offer more digital products and services, others pursue an M&A strategy of forming joint ventures (JVs) with fintech or technology firms.

As mentioned in our February 2020 bulletin on digitalisation trends, there are clear synergies between traditional FIs and fintech or technology firms. One example of partners that can complement each other are multi-finance companies or banks, which are able to offer loans, and peer-to-peer lending platforms, which in Indonesia are prohibited to provide on-balance sheet loans and may act only as intermediaries between lenders and borrowers. 

With OJK issuing more business licences to P2P lending platforms in 2019, traditional FIs and foreign investors are becoming more confident in this sub-sector and increasing the level and nature of their involvement from just forming contractual partnerships to investing substantially into such platforms or even incorporating new platforms.

The key to a successful JV is to find the right partner. To date, most JVs in this sector are combining the strengths of one party with technological capabilities with another party’s customer and user base.

In some sub-sectors, such as e-money and P2P lending, foreign investors will need to find Indonesian partners, given current restrictions on foreign equity ownership in these lines of business.


We are seeing more change of control transactions in the financial services and fintech sectors. Since the publication of our bulletin on digitalisation trends, OJK has partially relaxed the application of the single presence policy in the banking sector, leading to at least one BUKU IV bank acquiring two smaller banks, evidently as part of its digital strategy.

Apart from traditional FIs acquiring majority stakes in other traditional FIs to increase their product offerings or market share, newer fintech players and digital platforms seeking to enter the financial services world are also pursuing an acquisition strategy.

In some cases acquisition is their only option, since regulators are more supportive of new entrants taking over existing underperforming FIs to improve them, rather than issuing new licences. This is in line with OJK’s broader policy of consolidating the traditional FI industry and avoiding over-proliferation of smaller institutions, which are time consuming for OJK to supervise.


As the payment and digital platform sector continues to mature in Indonesia, we may well see broader industry consolidation through mergers among competitors as competition intensifies.

Such moves may indeed accelerate as market strains develop from the impact of COVID-19 on business operations.  

These mergers may allow market players to identify a clearer path to profitability, but may also reduce choice for consumers.

Indonesia’s competition watchdog (KPPU) will likely need to scrutinise such transactions carefully as well as address these complex new market realities.

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