JAKARTA -- Indonesia's unicorn Gojek said on Friday it had invested in a local bank with the aim of providing digital banking services on its platform.
The move looks set to spark another battle between its Singapore-based rivals Grab and Sea, who both have digital banking ambitions of their own, having acquired full licenses in the city state recently.
According to a filing with the Indonesian Stock Exchange, Gojek now holds 22.16% in Bank Jago. The company is believed to have spent close to $200 million on the deal, which was made through its subsidiary Dompet Karya Anak Bangsa, operator of Gojek's payment service GoPay.
"The ultimate aim of this partnership is for Jago to provide access to digital banking services through Gojek's platform, allowing Gojek's millions of users to instantly open a bank account with Jago and better manage their finances via the Gojek app," Gojek said in a statement.
"The partnership will also act as a model through which Gojek will go on to partner with other banking institutions to support them in reaching more customers," the company added, but did not specify whether further partnerships would entail financial transactions.
Bank Jago is one of the smaller private lenders in the country, with only 1.7 trillion rupiah ($120 million) in total assets as of September, according to QUICK-FactSet, making it the 45th largest bank in the country in terms of assets. In contrast, Bank Central Asia, the country's largest private bank, has total assets of 1 quadrillion rupiah.
The bank had been rumored to be an acquisition target for Gojek for some time, after it was acquired by investors with ties to the superapp provider, including Patrick Walujo, co-founder and co-managing partner at Northstar Group, an investment firm which was one of the earlier investors in Gojek. The bank was formerly known as Bank Artos Indonesia but investors changed its name earlier this year as they looked to transform the bank into a more digital-oriented lender.
Half of Indonesia's 270 million population are still unbanked, and while the investment into Bank Jago will not entitle Gojek to a banking license, it nevertheless offers Indonesia's biggest private tech company ample growth opportunities going forward.
The latest move also ensures that Gojek's rivalry with Grab and Sea looks set to continue in the banking sector as well. Gojek and Grab are both superapp providers which offer similar range of services, while Sea's digital payment service Shopee Pay has been making aggressive inroads into Indonesia.
Both of the Singapore-based companies recently received a digital banking license from the city-state's authorities. Analysts have pointed out that winning a digital bank license in Singapore could ease the application process for them in other markets.
Gojek, on the other hand, has always maintained that it harbors no ambition of becoming a bank itself, and will look to partner with existing banks. The Indonesian company believes that partnerships are a quicker way of scaling up digital banking services -- Singapore's digital banks are expected to start offering banking services early in 2022 -- while also believing that the tight regulations associated with running a bank could act as a drag on the company.
The Monetary Authority of Singapore requires minimum paid-up capital of 1.5 billion Singapore dollars ($1.13 billion) for digital banking applicants.
"This is the start of a new way of offering financial services to Gojek users," said Andre Soelistyo, co-CEO of Gojek, who oversees the company's payment business. "The collaboration will enable us to develop a process through which we can work with other banks. Our aim is to leverage more partnerships like this, to ultimately make the Gojek app a reliable resource for everyone's financial needs."