Aiming for 11 Million, Grab Builds Innovation Center in Indonesia

Singapore-based Decacorn Grab launched an innovation center (tech center) in Jakarta to attract 11 million Micro, Small, and Medium Enterprises (MSMEs) by 2025. This facility also aims to create more local digital talents.

President of Grab Indonesia Ridzki Kramadibrata said the innovation center focuses on research, design and testing of various devices and technology to attract more MSMEs. “This will answer the needs of the people of Indonesia and Southeast Asia,” he said during a virtual press conference for the launch of the Grab Tech Center, Tuesday (10/11).

The innovation center was created in Indonesia, because of the large number of MSMEs. There are at least 64 million micro and small businesses in the country, and only 16% of them have digitized their business. Therefore, the Indonesian MSME market is considered suitable for testing various technological solutions.

Moreover, the government is encouraging small and medium-sized businesses to digitize their businesses during the corona pandemic. Research from the International Data Corporation (IDC) and Cisco also shows that digitizing MSMEs can increase state revenue by US $ 160 billion-US $ 164 billion (Rp. 2,372.6 trillion-Rp. 2,432 trillion) by 2024.

The amount depends on the expertise of business actors in utilizing technology in their business. In Indonesia, Grab has attracted 6 million MSMEs. During the coronavirus pandemic, the company collaborated with 450 thousand new business people.

Grab Hopes to be able to Digitize 11 Million MSMEs by 2025

With the existence of this research center, Grab hopes to attract five million MSMEs, bringing the total to 11 million by 2025. This facility will later handle technology research and development (RnD) for GrabKios, GrabMerchant, and GrabFood.

The technology developed includes product design and management, product analysis, software engineering to quality assurance engineering. The innovation center is located in Gama Tower and occupies nine floors. This facility is named BJ Habibie Hall, taken from the name of the three Indonesians who are also technological figures.

In addition to developing MSME business technology, the innovation center focuses on capturing local digital talent. “We will bring together technology talents in Indonesia to build solutions that are easy to use and reliable,” said Managing Director of Grab Indonesia Neneng Goenadi.

Grab actually opened a research and development center in Jakarta in 2017. The local digital talents there develop various technologies such as design products, analysis to software engineering. The company also has other digital talent development programs such as Internal Future Leaders for Grab employees and Tech Future Leaders for digital talents outside of Grab employees.

For the development or acceleration of potential startups, the company provides the Grab Ventures Velocity program. This was done because research by McKinsey and the World Bank shows that Indonesia needs nine million digital workers by 2030. This means, there is a need for 600 thousand digital workers per year.

Previously, Grab Expanded by Investing in LinkAja

Grab leads the series B funding of state-owned payment technology (fintech) companies, Fintek Karya Nusantara (Finarya) or LinkAja, which was announced Tuesday (10/11). This move strengthens Singapore’s decacorn position in Indonesia’s financial sector.

Based on CB Insights data, Grab and Tokopedia are OVO investors. Crunchbase data also shows that Gojek’s competitor entered OVO in September 2019. Two months later, Lippo Group founder and owner Mochtar Riady said he had sold two-thirds of the shares in the purple fintech.

Grab’s entry into OVO and LinkAja strengthens its position in the financial sector. “This is entering an era of ‘the strong who wins’,” said Kejora Ventures’ Managing Partner Eri Reksoprodjo, Wednesday (11/11), responding to Grab’s investment in LinkAja.

He considered that the LinkAja business was attractive to technology giants and investors. “The market share is very large, customers of state-owned (Himbara) and private bank associations. It could be hundreds of millions,” said Eri.