WeLab, a Hong Kong-based fintech company, announced Tuesday that it has acquired Bank Jasa Jakarta (BJJ), an Indonesian commercial bank after raising $240 million.
The unicorn has expanding presence in Asia and is planning to launch a digital bank to capture Indonesia’s enormous unbanked population in the second half of next year.
Per TechCrunch, a consortium led by WeLab has raised $240 million from existing and new investors, which the company claimed was the largest fintech funding in Indonesia this year. The capital will go toward acquiring BJJ’s stakes and “tech investments,” the company said.
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WeLab was founded in 2013, and has since then scaled hurdles to become a leader in Asia’s financial market. By acquiring commercial banks, the fintech is setting up a new dynamic in the finance industry.
The consortium, called WeLab Sky, will acquire the stakes of BJJ to become its sole controlling shareholder. WeLab Sky has already bought a 24% stake in the bank, while the remaining shares for majority control will be transferred upon securing regulatory approvals, according to TechCrunch.
WeLab ventured in to Hong Kong with its digital bank last year with a host of services. The company currently operates a suite of consumer fintech products across Asia, including the virtual bank and a lending product in its home city, as well as several types of lending services in mainland China and Indonesia. It also provides technology “enabling” services to traditional financial institutions with the backing of Hong Kong billionaire Li Ka-Shing’s TOM Group.
Indonesia has become a huge market for payment operators, with a horde of them jostling for market shares. With its tech-savvy consumers, the Asian country has attracted companies like Xendit, a newly minted unicorn that provides digital payments infrastructure, Payfazz, which offers a mobile app for handling routine financial tasks, and GoTo, the payment gateway under behemoth GoTo.
Having established in Hong Kong, a global financial center, WeLab has witnessed its customer-base grow. The company said it has amassed over 150,000 digital banking customers and its online lending app for Southeast Asia, Maucash, which it launched through a joint venture with Astra International, has more than three million Indonesian users.
WeLab’s acquisition of commercial banks is a play that will likely become a huge part of the fintech market. The emerging market is posing a threat to traditional financial industry, taking a large number of customers, especially young people, off commercial banks. Following WeLab’s step, more commercial banks are expected to be acquired by fintech players in the near future.
