WeLab-led group raises US$240 million to buy Indonesian bank for foray into digital banking

The transaction marks WeLab’s expansion into its second digital banking operation in Asia, after introducing Hong Kong-based WeLab Bank in 2020

As much as 77 per cent of Indonesia’s population of 270 million people are underserved by banks

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Indonesia offers a huge opportunity to introduce digital banking services, WeLab Bank’s Loong says. Photo: Xiaomei Chen

Published: 8:00am, 7 Dec 2021Updated: 11:01am, 7 Dec 2021

A consortium led by WeLab has raised US$240 million to buy an Indonesian bank and grow its digital banking operation, marking the second foray by Hong Kong’s home-grown fintech unicorn into Asia’s virtual financial services industry.

The WeLab Sky consortium would buy a controlling stake in Bank Jasa Jakarta (BJJ), and build a digital banking platform to provide branchless financial services to the portion of Indonesia’s population who are underserved by banks, making up an estimated 77 per cent of the population of 270 million people.

“Indonesia, with over 180 million tech-savvy young consumers, provides a huge opportunity for us to introduce digital banking services for those who are now unable to get any banking service,” said Simon Loong, co-founder and chief executive of WeLab, in an interview with South China Morning Post.

The development of the digital economy in Indonesia is on the rise, where the gross merchandise value of online shopping is estimated to triple to US$124 billion by 2025, from last year’s US$44 billion and compared with US$8 billion in 2015, according to a November report by Temasek, Google and Bain & Co.

Indonesia’s economy, the biggest in Southeast Asia, is expected to grow by 4.5 per cent in the fourth quarter this year, according to the central bank. Photo: EPA-EFE

The group will to look for expansion opportunities in the Greater Bay Area, as well as in Southeast Asia countries such as Thailand and Vietnam, Loong said.