US venture capital firm Ribbit Capital, a fintech solution partner of the world’s largest retailer Walmart, has bought a minority stake in a Jakarta-based digital bank that also counts Singapore sovereign wealth fund GIC as an investor. Bank Jago, Indonesia’s first full digital bank, which aims to tap not only urban customers but also the low-income in the country who are often underserved, has partnered with various online ecosystems, including Gojek, a ride-hailing application that has expanded to food delivery and other services, and Akulaku, which finances online shoppers. Gojek is a key shareholder and strategic partner of Bank Jago. In March this year, GIC acquired approximately a 9 per cent stake in the bank for about 3 trillion rupiah (S$285 million).
Ribbit Capital, which invests in early-stage companies, including online brokerage firm Robinhood, did not disclose the size of its investment or the stake in the bank. The venture capital firm has made several profitable investments in fintech companies, including Affirm, a United States online shopping financing provider. Digital banking is expected to provide a boost to Indonesia as it will cater to the unbanked in the country, which stands at up to one-third of its population of 270 million people. Meanwhile, smartphone penetration in the country has reached between 70 per cent and 80 per cent.