Indian venture capitalist Sequoia Capital India was joined by investors Tencent, Prosus Venture and Harvard’s endowment fund to inject a further $65m (£47m, €54m) into Indonesian investment platform Bibit.
The firm intends to develop and launch products, expand its team, and invest in financial education and awareness among young people, according to Bibit’s chief executive Sigit Kouwagam.
Bibit was launched in 2019 by Stockbit, a stock investing platform and community, and is one of several Indonesian investment apps targeting investors. Others include SoftBank Ventures-backed Ajaib, Bareksa, Pluang and Fundtastic.
Bibit operates a robo-adviser services app for mutual funds, investing users’ money based on their risk profiles and return objectives, and estimates that 90% of its one million users are millennials and first-time investors.
The firm is also the investment partner of technology firm Gojek, which directs users to the Bibit app, where they can make payments with GoPay.
The number of mutual fund investors in Indonesia grew 78% year-on-year in 2020 to 3.2 million, according to the Indonesian Stock Exchange. In the first quarter of this year, a further one million mutual fund investors entered the market.
Digital potential
Indonesia has been the most successful in terms of digital outreach, with fund houses — including foreign players — employing platforms to penetrate outskirt areas where their brands are less widely known, according to a recent report by consultants Cerulli.
Yet, despite the growth of online channels, banks still account for more than half of mutual fund assets under management distributed in Indonesia, Cerulli research found.
Moreover, the percentage of retail investors in Indonesia is still low, compared with Singapore and Malaysia, for example.
Fewer than 2% of Indonesians invests in stocks and mutual funds, according to the Indonesian stock exchange, which provides investment platforms with an opportunity.
Apps such as Bibit focus on content that helps make capital investing less intimidating to first-time investors, and tempts them with lower fees and minimum investment sums than traditional brokerages.
Other apps, such as Ajaib and Pluang, have already attracted funds from venture capital firms this year.
Trading app Ajaib raised $90m from backers including US leader Robinhood; and Pluang, a digital-gold savings app, attracted $20m in its pre-Series B round.
Bibit’s latest funding follows a series A round in January, which collected $30m from Sequoia Capital India, East Ventures, EV Growth, AC Ventures, and 500 Startups.
“We believe that all Indonesians deserve a better future. Enabling people to invest helps achieve that,” said Kouwagam.
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