Bukalapak’s mitras to benefit from “open digital banking ecosystem,” says president

Teddy Oetomo, President, Bukalapak

Indonesian e-commerce marketplace Bukalapak, which has announced plans to pick a stake in the digital lender PT Allo Bank Indonesia Tbk, is “adopting an open ecosystem approach” and wants to collaborate with multiple digital banks.

“Financial services can be perceived as the bloodstream of all business lines. If our merchants, the Mitras, want to keep growing, they all will need robust support from financial services,” said its president Teddy Oetomo in an interview to DealStreetAsia.

Bukalapak is currently in the process of rolling out a new application for digital mobile banking service with Standard Chartered, Oetomo added. The company will also “consider Bank Fama as a connection,” he said, adding “we don’t need to become a shareholder [in Bank Fama]. We can just connect the digital bank to our ecosystem.”

Bukalapak backer Elang Mahkota Teknologi Tbk — popularly known as the Emtek Group — announced in November that it is acquiring PT Bank Fama International, a small local lender, as part of efforts to increase its revenue.

Bukalapak refrains itself from having an exclusive partnership with any lender or financial service. “Digital bank industry is still in a growing stage, the winner has yet to emerge, so there’s no need to be exclusive,” according to Paulus Jimmy, an analyst at Sucor Sekuritas.

Bank Allo to benefit from multiple ecosystems

On plans to buy a stake in Bank Allo, Oetomo said that Bukalapak may offer a powerful boost to the digital lender to get ahead as competition heats up among digital banks in the archipelago.

Bukalapak — along with consumer conglomerates Salim Group and CT Corp, ride-hailing giant Grab, and used car marketplace Carro — is set to take part in Allo Bank’s rights issue later this month. The lender has also entered into a partnership with Indonesian travel unicorn Traveloka.

The rights issue will make Bukalapak the second-largest shareholder in the digital bank, just behind PT Mega Corpora, a financial services firm that is part of the CT Corp.

“Allo Bank might be the only digital bank with so many ecosystems [following the rights issue],” said Bukalapak President Teddy Oetomo.

“By participating in multiple ecosystems, Allo Bank, as a digital banking provider, can get views, information and perspectives on users from different parts of their life. This is very helpful for creating products that are suitable or needed by each of these users,” he said.

According to Oetomo, Bukalapak offers additional value for Bank Allo and other stakeholders in the consortium as it has data points beyond Tier 1 city dwellers, who are likely to be already using banking and digital services.

Allo Bank, previously known as Bank Harda Internasional, has yet to publicly launch its digital banking service. As of Wednesday, the lender does not have an app on the Google Playstore.

The shares of the IDX-listed lender, however, hit a record high on Wednesday a day after the investment announcement, and closed at 9,500 rupiah apiece, up 10.23% from Tuesday’s closing. In January 2021, the stock was trading at around 157 rupiah apiece and has rallied throughout the year as big tech firms were seen to be scouting for digital banks to acquire.

Allo Bank will face direct competition from other digital banks, which are backed by a traditional lender or tech company. Bank Jago, for example, is backed by Indonesia’s largest tech group GoTo, which includes e-commerce platform Tokopedia, ride-hailing Gojek, payment fintech Gopay, and wealthtech firm Bibit.

There are also Seabank, backed by a Sea-anchored ecosystem that includes e-commerce firm Shopee, and Bank Neo Commerce owned by Alibaba-backed BNPL Akulaku.

“It will be an exciting competition,” Nailul Huda, a Jakarta-based researcher at the Institute for Development of Economics and Finance (Indef), said.

With support from CT Corp, Huda expects the conglomerate will integrate its well-established banks such as Bank Mega and supermarket chain Transmart with Allo Bank. There is also Salim Group that owns some media companies, fast-food chains, carmakers, and FMCG products.

“Bank Allo could be the digital bank within the Bukalapak-Grab ecosystem which is currently missing. Not to mention Salim Group with its minimarket business and CT Group with its supermarkets. The ecosystem that is being built is really great,” Huda said.

Bukalapak’s IPO proceeds

Allo Bank is the first investment made from the proceeds of Bukalapak’s record-breaking $1.5 billion initial public offering last year. Bukalapak has allocated 33% of the proceeds for business acquisitions and joint ventures.

It is set to spend 1.19 trillion rupiah ($83 million) to acquire 2.5 billion Allo Bank shares.

“We don’t foresee to spend all of [the 33% allocated] this year, actually, some are to be spent this year, but I think it will be enough for the next 3-5 years,” said Oetomo.

On top of its IPO, Bukalapak has also signed an uncommitted revolving short-term loan facility of up to 2 trillion rupiah with PT Bank DBS Indonesia in November as part of its strategy to diversify its source of funding.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.