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
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.
WeLab Sky agreed with shareholders to first buy 24 per cent of BJJ. It will then seek Indonesia’s regulatory approval to buy the remaining stake for majority control of the bank. Loong did not give the exact price and other details of the transaction.
BJJ, headquartered in Jakarta for more than 40 years, operates 11 commercial bank branches in the Indonesian capital, serving individuals and small and medium enterprises.
Loong said WeLab plans to let BJJ continue the traditional branch network but it would also help to expand its digital banking services next year.
Hongkonger Loong co-founded WeLab in 2013. In eight years, the company has expanded rapidly in Hong Kong, mainland China and Indonesia, providing online lending and virtual banking services to 50 million individual customers and 700 corporate customers.
“We’re excited to welcome WeLab as the new shareholder to bring BJJ into the new digital banking era,” said Handrie Wirawan, president director of BJJ, in a statement. “BJJ has been undergoing digital transformation since 2018, and this strategic initiative is aligned with our commitment and vision in offering digital banking services to more customers.”
