Gojek started as a ride-hailing app. But since then, it, has gone far beyond to enter the culture, and also become one of the pioneers in the country's tech sphere.
And this time, the Indonesian 'decacorn' tech giant has paid about $160 million to increase its stake in PT Bank Jago, making its biggest investment in financial services to date.
Through its GoPay payment and financial services arm, Gojek bought almost 1.96 billion shares at Rp1,150 rupiah each (8 U.S. cents) at the negotiated market, according to a stock exchange filing.
The internet firm used call options to acquire its stake, completing the deal at a steep discount, and paid about Rp2.25 trillion rupiah in total.
Combined that with its existing stake of 4.14%, the additional investment makes Gojek’s holding in Bank Jago to increase to 22.16%.
The acquisition was made under PT Dompet Karya Anak Bangsa, the company which operates the payment service GoPay
According to Gojek Co-CEO Andre Soelistyo said in a statement:
“The collaboration will be the start of a new way to offer financial services to Gojek users, as well as to develop a model to partner with other banks.”
He added that the company’s investment in Bank Jago was part of its long-term strategy and investment plan to strengthen the growth and sustainability of Gojek’s business in the future.
The strategic partnership cements Gojek’s effort to strengthen its foothold in the financial services business, as well as confirms rumors in the market about its interest in Bank Jago.
At this time, Gojek’s payment service GoPay is ranked third in user penetration after ShopeePay and OVO, according to a survey conducted by market research firm Ipsos back in October 2020. However, OVO and GoPay closely led the race in terms of user awareness.
And here with the increased stacke, Gojek, the company that was co-founded by Nadiem Makarim, further reflects its ambition as it races to the top.
As for Bank Jago, the publicly-listed company was previously named Bank Artos Indonesia. It is a small bank that was acquired by Patrick Walujo, a venture capitalist and co-founder and managing partner of Gojek’s early backer Northstar Group, and banker Jerry Ng.
With both Patrick and Jerry planning to turn the bank into a technology-based digital bank, selling its stake to Gojek increased Bank Jago's stock prices to more than 1.5%.
The strategic collaboration between a bank and a technology company like Gojek, is regarded as the first of its kind in Southeast Asia, said Bank Jago president director Kharim Siregar.
“This thorough collaboration will be key to Indonesia’s digital economy growth,” he said. Kharim also stressed that the bank would still be open to partner with other digital ecosystem players to widen financial access and provide digital financial solutions to its customers.
With the increased stake at Bank Jago, Gojek aims to allow users to open bank accounts with Bank Jago, and then allowing users to manage their funds right inside the Gojek app, that according to a statement from the company. GoPay has been focused on extending digital financial services to merchants and drivers for the past few years.
At this time, Indonesia is the fourth-largest unbanked population in the world, with about 52% of adults (95 million residents) don’t have access to a bank account. Around 47 million Indonesians have very limited access to modern financial services.
With Gojek's foray that goes deeper into fintech, Gojek plans to change that.