Fintech platform WeLab has acquired PT Bank Jasa Jakarta (BJJ), a commercial bank in Indonesia, with plans to establish its second digital bank in Asia following the successful launch of WeLab Bank in Hong Kong.
WeLab, headquartered in Hong Kong, has drawn strong interest from existing and new investors who have already contributed US$240 million for this transaction, representing the largest fintech funding in Indonesia in 2021. The funds will be used to acquire the controlling stakes from its existing shareholders and tech investments.
Indonesia represents a huge opportunity to provide accessible and innovative digital banking solutions, the company says. The country, which has around 180 million young and tech-savvy consumers, is one of the largest financially underserved markets in Asia. It is estimated that 77% of its people are either unbanked or underbanked.
WeLab plans to launch the second digital bank in Asia in the second half of 2022. It already has over 150,000 digital banking customers since launching WeLab Bank in Hong Kong in 2019. It has also established presence in Southeast Asia since 2018 through a joint venture with Astra International to operate a licensed online lending app, Maucash, which already has more than three million Indonesian users.
In the latest transaction, a WeLab-led consortium, WeLab Sky Limited, has entered into a share purchase and subscription agreement with all the shareholders of BJJ. WeLab Sky will acquire the stakes of BJJ to become the sole controlling shareholder. As the initial step, WeLab Sky has already completed the strategic investment for a 24% stake in the Indonesian bank. The remaining stake for majority control will be completed upon obtaining the relevant regulatory approvals, including from the Financial Services Authority (Otoritas Jasa Keuangan) of Indonesia.
Simon Loong, founder and group chief executive officer of WeLab, says: "We continue the journey that we started in 2018 to build one of the first pan-Asian digital banking platforms, first in Hong Kong and now in Indonesia. WeLab combines its advanced digital banking technology with the BJJ network to further grow the bank's business towards a bright digital future.
“BJJ has earned an excellent reputation for being a trusted retail bank in the market over the last 40 years. We look forward to building on this foundation with our fintech expertise, and success of operating a licensed digital bank in Hong Kong, to build a tech-driven digital bank that will be financially inclusive for the people of Indonesia."
Handrie Wirawan, BJJ’s president director of BJJ, notes that the bank has been undergoing digital transformation since 2018. “This strategic initiative is aligned with our commitment and vision in offering digital banking services to more customers. With the experience and expertise of WeLab in digital banking and fintech, we are confident that BJJ can further improve our customers' financial wellbeing with advanced banking technology," he adds.
J.P. Morgan is acting as financial adviser to WeLab.
WeLab operates in three markets under seven key brands, including WeLend and WeLab Bank in Hong Kong, WeLab Digital, Taoxinji, Wallet Gugu, and Tianmian Tech in mainland China, and Maucash in Indonesia.
Among its investors are Allianz, China Construction Bank International, International Finance Corporation, CK Hutchison's TOM Group, and Sequoia Capital.