Hong Kong Fintech Startup WeLab Acquires Bank Jasa Jakarta

Hong Kong-based fintech startup WeLab is ready to compete in the Indonesian digital banking industry. WeLab officially acquired PT Bank Jasa Jakarta (BJJ) to establish a digital bank which is expected to operate in the second half of 2022.

Based on its official statement, the WeLab consortium through Welab Sky Limited (WeLabSky) signed a Share Purchase and Subscription Agreement with all BJJ shareholders to become the sole controller.

As a first step, WeLabSky already holds 24% of BJJ’s shares, of which the remaining shares to be controlled by the majority will be settled after obtaining approval from the relevant regulators, including the Financial Services Authority (OJK). Meanwhile, J. P Morgan acted as financial advisor to WeLab on this acquisition.

WeLab’s move has attracted new and existing investors to disburse funds of $240 million or around Rp3.46 trillion – also claiming to be the largest fintech funding in Indonesia in 2021 – to launch this corporate action.

WeLab Founder & Chief Executive Simon Loong emphasized that BJJ has built an excellent reputation as a trusted retail bank in Indonesia for more than 40 years.

“We cannot wait to build on this foundation, armed with our fintech expertise and success in operating a licensed digital bank in Hong Kong, to build a tech-driven digital bank that will provide inclusive financial services for Indonesian people.”

Meanwhile, BJJ President Director Handrie Wirawan believes WeLab’s experience and expertise in the fintech and digital banking industries can encourage BJJ to improve financial services with technology support.

“We are pleased to welcome WeLab as a new shareholder and bring BJJ into a new era of digital banking. BJJ has gone through digital transformation since 2018, and this strategic initiative is in line with our commitment and vision to offer banking services to many consumers,” he explained.

Company Profile

WeLab is a p2p lending startup that operates in three countries through seven financial product brands, including WeLend and WeLab Bank in Hong Kong; WeLab Digital, Taoxinji, Gugu Wallet, and Tianmian Tech in China; and Maucash in Indonesia.

A little information, Maucash is a financial product owned by Astra WeLab Digital which is a joint venture of Astra Financial and WeLab which was established in 2018. Thus, this digital bank will become WeLab’s second business portfolio in Indonesia after Maucash.

WeLab Bank has 50 million users and more than $10 billion in loans. Meanwhile, WeLab has 150,000 digital banking users in Hong Kong.

Meanwhile, Bank Jasa Jakarta is a retail bank that offers savings products, loans, and banking services. BJJ has 11 sub-branches and three cash offices with ATM networks joined in the Prima network in all major cities in Indonesia.

Lending and Wealth Products

Citing the Business Times, Loong said he would take his experience building a WeLab Bank and his expertise in the fintech field as a strong advantage in entering digital banking. Moreover, the digital banking industry and business model is still relatively new in Indonesia.

The combination of in-depth knowledge of the operation of banking assets and the agile culture of technology companies is considered to be his strategy to successfully operate a digital bank.

“We have 2-3 years to start building and operating a digital bank. Many companies are still talking about [how to] build a bank, while our products are already ready,” he explained.

In addition to deposits, loans, and payments, Loong revealed that he will release wealth products which will also be available at Indonesian digital banks. He assessed that the presence of this wealth product would be an entry point for this new digital bank to reach the break-even point (BEP).

As is known, a number of startups and banks in Indonesia have already taken similar steps in order to capture a market niche among the underbanked and unbanked by financial products.